PANJIM: The economy may be at a standstill, tourist season may have been awful and less said the better of the mining imbroglio. However business is still being transacted and quite profitably too.
For the various players in the organised retail business in Goa, they are all experiencing growth at a pace that requires them to stay on their toes as they tackle the demands of a population that is increasingly taking to these stores for their daily requirements.
Vinay Borkar of Borkars Super Stores, the family which has been in the business for over a century said “My forefathers started out with a small shop and the business developed and today we have a number of stores.”
The volumes he said had increased dramatically and the margins had also increased with his store having something for everyone. A sentiment also expressed by Kirit Maganlal of Magsons who has been in the business for 25 years. He said that in the last ten years there has been a change in the business with people spending more on upper end products.
Asked what he meant by upper end products he said imported meats, imported cheese, imported sauces and the like. The state he said had a unique advantage over the rest of the country due to the fact that tourism played a very big role in the economy of the state and that almost 50% of the families in the state had relatives working abroad. This meant that when they came down to Goa they would demand the meats, the wines, the sauces they had come across during their travels abroad. Given the quantity sourced for the state it was not possible to import in directly he said.
Companies in Delhi, Mumbai, Bangalore and from Chennai imported these products from whom he sourced these products.
The organised retail market in Goa is growing at 20% with food retail growing nationally at 18%. Kirit said Magson was growing at 20% year on end and this growth he felt would be sustained over the next couple of years.
The rise of such outlets is also driven by the fact that time is a very valuable and perishable commodity. Prakash Pereira of Delfinos Hymart and Kirit felt that no one had the time to go out everyday to buy the necessities for the house. The kirana shop at the corner may have the personal touch but the big outlets understood your purchase.
Kirit said “We have staff, that tracks the consumption patterns of our members of the loyalty club. We have around 10,000 members and we know approximately when it is they come into shop and we accordingly stock the shelves.”
The kirana shop he said could provide credit but his store accepted all credit cards in addition to Sodexho coupons. Prakash said he had plans to have a loyalty system and he would send sms on rates of fish and other food items everyday. There would be schemes for different festivals
The business was as they put it ‘cut-to-cut’ which meant there was always pressure on margins with systems being very important. While loyalty programmes, point of sale (PoS) solutions, billing management solutions, RFID technology or inventory management solutions are all that a majority of retailers have banked upon thus far, the future of retail IT looks much more promising.
People were very important in this business and finding the right candidate is a very big problem in the state. Prakash say’s that at the client interaction level he has staff who are also students which means many may leave once they complete their college education.
Kirit said he had a three level recruitment policy to ensure that he inducted the right kind of staff. Vinay Borkar voiced the same concern about the absence of trained personnel in the field in the state.
Kirit said “We need people who have skills in the hospitality business to work in the industry. The problem is that in this industry there is absolutely no glamour so then how do we get people.”
Technology and personnel was important to fight customers pilfering goods. Kirit said he had a studio that tracked customer entry and exit at each every outlet with camera. He claimed that everyday there were at least two incidents everyday ranging from school kids trying to swipe a chocolate to adults in Mercedes Benz trying to take a bar of soap. Pilferage he said was approximately 0.5 % which was very high but which was considered normal. Anything higher would make him go out of business.
Asked where the business would be in five years, Kirit said he intended to also we available on line. Prakash said he wanted to offer more at his store at very competitive prices.
With regards to trying to conduct business in the state Kirit felt that the cost of real estate in Goa was prohibitive. He said he could afford up to Rs 20 per sq ft where as in the state the cost was Rs 40. The stamp duty was a huge impediment however gst would make life easier. Asked if goan retailers would be able to handle the entry of national brands they all said that they would be able to with Kirit saying that Big Bazar would be entering but with a different vertical , ie a gourmet vertical.
With the organized sector in the food and grocery business valued at anywhere between Rs 400-500 crores and growing at 15-18% expect more action in the years to come.
