Cash and Carry is a format type which is supposed to operate in the wholesale and semi-wholesale space. The stores would be very similar to hypermarkets, except for the pricing and certain range of products. Typically benchmarked with the wholesale markets, these stores would offer competitive prices on bulk purchases as also run promotions. Typically, the smaller family run businesses like mom & pop stores, local café’s, etc., patronize these stores. The customers require a membership card to purchase which is usually given only to businesses. Of course, there are end consumer sales which are supposed to be for the personal use of such business owners/ operators.
Typically such stores focus on 3 broad types of customers.
- HoReCa – Which is an acronym for Hotels, Restaurants and Café/ Caterers /Canteens
- Traders – All the stand alone stores
- Other Business – Typically small and medium enterprises who would require things for their pantry and office supplies.
Internationally the HoReCa customers are the primary target audience for any cash & carry store. These stores sell a wide range of heat-&-serve as also semi cooked preparations which are picked up by the HoReCa customers for their businesses. Apart from being high margin products these create high levels of loyalty because of the differentiated range that be offered. Given the high incidence of eating out by individuals abroad, this is a very lucrative and fast turn around business segment.
With the spate of Cash & Carry plans being announced largely driven by the FDI cap in India, will this strategy work in India? Would these stores succeed where other corporate retail formats have floundered?
1 comments:
Rajesh:
Great article! Walmart, or whoever, also need to consider the following:
1) Package Size: Typical C&C packages tend to be large; they need to think of “bicycle packs” in India, (at least till the Nano is commonplace).
2) Ready Credit: Trusted Mom & Pop retailers can often get word-of-mouth credit if they are short of cash, without having to go through extensive form-filling and credit checks.
3) Customer Returns Credit: Has anyone tried to return an item bought at a small Indian retail store, even if it is defective? Good Luck! This is a loss leader for them, but could be converted to asset.
I am sure there are more things like this. The point is, C&C’s, western or Indian, need to think like a small retailer, better yet run a small retail store for month in the target area, before offering a one-size-fits-all solution, don’t you think?
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