As Kolkata-based retailer Spencer’s Retail charts its recovery, the company has turned its attention to aggressively expanding its presence in select regional strongholds.
After rationalizing its pan-India store network over the past few quarters, Spencer’s has now outlined detailed plans to zone in on three key geographical clusters for growth – Eastern UP, West Bengal, and the Hyderabad/Coastal Andhra region.
The renewed focus stems from the realization that having a dense concentration of stores allows Spencer’s to extract greater efficiencies in operations including supply chain, logistics, marketing and promotions in the regions.
“We believe we can drive stronger growth by deepening our penetration in existing clusters and servicing those stores much more efficiently on multiple fronts,” explained Spencer’s CEO Anuj Singh during a recent earnings call.
As part of its expansion roadmap, Spencer’s aims to open around 1 lakh square feet of additional retail space across both its namesake banner stores and upscale Nature’s Basket outlets over the course of the next fiscal year. New store openings will primarily target the aforementioned three regional clusters.
The Tactical Shift
The tactical shift aligned to population clusters marks a purposeful departure from Spencer’s past strategy of scattering its presence too thinly across pan-India in pursuit of a broader national footprint. That ambitious plan proved to be unsustainable as stores in several markets struggled due to sub-optimal scale.
The change in direction towards tapping regional pockets coincides with the first signs of a turnaround for Spencer’s after years of lackluster growth. During the December quarter, Spencer’s reported its first year-on-year sales growth in several quarters along with handsome improvement in profitability.
Concentrating firepower among regions where Spencer’s enjoys strong brand recall and consumer loyalty not only allows for operational efficiencies, but also provides scope for the retailer to further cement its leadership in key markets.
Alongside store network expansion within priority clusters, Spencer’s will also embark on renovating select outlets and introducing newer store concepts to elevate the overall shopping experience for customers. The company’s premium Nature’s Basket chain of gourmet food stores will also see acceleration in additions over the coming year.
With a defined cluster-focused gameplan now falling into place, execution will be vital as Spencer’s looks to regain its lost glory in important regional bastions amid a grocery retail market that remains dynamic.