RPG can leverage its local knowledge to tailor offerings specifically The mass

Rpg can leverage its local knowledge to tailor

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RPG can leverage its local knowledge to tailor offerings specifically.The mass grocery retail sector is set to experience phenomenal growth, and RPG is set to be a majorbeneficiary with its wide and diverse store network.ThreatsWidespread poverty and the country's size and regional diversity act as impediments to the development ofthe mass grocery retail sector and keep the consumer base small.Fast-expanding multinationals could undermine RPG's gradually built-up market share.RPG's hypermarket division requires significant further growth, which means enormous long-term outlay bythe company.The inevitable entry of multinationals and their massive investment potential could seriously undermineRPG's growth plans, with such investments already underway.Company OverviewRPG Enterprises operates four grocery retail networks - Daily, Express, Super and Hyper - under the Spencer's Retail banner. The firm,which is part of leading Indian conglomerate RPG Group, also operates Music World music stores and Books and Beyond books, giftsand stationery outlets in the country. Commencing retail operations in 1996, RPG parted ways with its retail partner, Hong Kong'sDairy Farm International, in 2005. For RPG, this meant the rebranding of the Foodworld supermarkets that it returned to its Spencer'sgrocery retail banner.StrategyRPG plans to invest a total of USD628mn in expanding its existing retail operations and rationalising its four-format grocery retailoffering into three clear-cut brands. RPG is likely to drop one of its mid-sized formats to retain one large-scale, one medium and onesmaller convenience format. Expansion is also integral to the firm's plans, and it is looking to build its presence from 32 citiescurrently to 119 cities. Expansion in terms of store numbers is not RPG's sole aim; the company will also look to continually improveits existing offerings by adding extra in-store services, as well as investing in information technologies for its supply chain andIndia Food & Drink Report | Q3 2018bmiresearch.com57
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logistics. These expansions will very likely leave RPG in a good position to benefit from the ongoing spread of modern retail in India.Although modern retail currently accounts for only a small part of overall grocery retail sales in India, there are going to betremendous opportunities for growth, given the underdeveloped nature of the Indian mass grocery retail sector. As affluence inIndia rises steadily over the coming years, consumers are expected to increase their spending and turn to modern retail formats insearch of the convenience and quality that they desire and can increasingly afford, which in turn presents very positive implicationsfor mass grocery retail sales.
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  • Summer '18
  • Sagar Arora
  • ........., Alcoholic beverage, Food processing

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