Retail majors in rightsizing mode

KOLKATA: In a bid to maximise sales per square feet, India���s frontline retailers are increasingly looking at ways to restructure their stores. Leading players like Future Group, Spencer���s Retail, Shopper���s Stop and Vishal Retail plan to rightsize their stores and replace slow-moving categories with speciality formats under the shop-in-shop model.

Retailers feel such an approach will also help them improve gross margin returns per sq ft in the present environment when same store sales growth is quite weak. ���A shop-in-shop approach helps increase revenue per sq ft. It enables best utilisation of space and is a good way to do away with excess space and reduce space for categories which are not doing well,��� Future Group CEO-Retail Rakesh Biyani told ET.

Future Group plans to offer a wider choice in large-format stores like Big Bazaar by setting up speciality zones under the shop-in-shop model. ���This approach provides consumers with a wider choice. We have a similar model for the Pantaloons outlets in the East and may replicate it elsewhere,��� Mr Biyani said. Shopper���s Stop recently tied up with Cafe Coffee Day to manage cafes within its stores. ���It is an ongoing process to maximise returns,��� said managing director BS Nagesh. The most common categories where retailers are looking for shop-inshop outlets include food and beverage, saris and areas which have more customer-connect requirement like cosmetics, personal care products, fine jewellery and salons, says Retailers Association of India CEO Kumar Rajagopalan.

Spencer���s Retail, which is presently rightsizing by cutting down on 20% of its retail space, also plans to focus on shopin-shops. ���In a slowdown, shop-in-shops are the best way to leverage domain knowledge of speciality players and maximise returns. Such outlets will be set up through our group���s speciality formats like Books & Beyond, Mera World, Music World as well as in collaboration with other players,��� Spencer���s Retail marketing head Samar S Sheikhawat.

Vishal Retail group president Ambeek Khemka said the retailer too is restructuring its 171 stores nationally. ���We have already completed the exercise for 35-odd stores and the results are encouraging. In fact, small and regional brands are lapping up the opportunity to follow the shop-in-shops model,��� he said.