Spencer's Retail: Pioneering Indian Retail for Over a Century
CATEGORIES: RETAIL MANAGEMENT
Supermarkets and hypermarkets are ubiquitous in India's urban landscape today. Originally concentrated in the central business districts of Tier-1 and Tier-2 cities, these retail formats can now be found in every neighborhood and city across India.
Like most Indian industries, the origins of retail can be traced back to the British Raj. In 1863, two British acquaintances, John William Spencer and Charles Durrant, who worked as auctioneers and commission salesmen, started the first store on Mount Road in Chennai. Originally called Durrant & Spencer, the exit of Charles Durrant in 1867 led to a name change to JW Spencer and Co.
Laying the Foundation for Retail-Centric Thinking
The period between 1867 and 1920 was one of slow growth, during which John Spencer spent most of his energies building a large supply network of traders and merchants across undivided India.
In 1920, Spencer's became the first grocery chain in India to stock a large range of products under one roof, priced at rates comparable to neighborhood kirana shops. Long before the Costcos, Walmarts, and Targets of the world took root in the US and spread across its vast boundaries, Spencer's was already a large chain of stores extending from Karachi in the West to Chittagong in the East, from Delhi in the North to Tuticorin in the South.
The Need for Partnerships in Independent India
Post-independence, growth was slow again. The British owners of the company, who had by then relocated to the UK, apparently found it difficult to navigate the complex labyrinths of policy in India's license Raj. Additionally, retail was not considered an important industry and was not given a policy boost. Despite the ambiguity, Spencer's started the first supermarket chain in India in 1980. By now, Spencer's had become a ripe target for acquisition.
In 1989, the R.P. Goenka group, a prominent business conglomerate in India, acquired a majority stake in Spencer's, opening up a new chapter of growth. In 1995, a technical assistance agreement was signed with Hong Kong-based Dairy Farm International Holdings Ltd. Accordingly, a new chain of supermarkets under the brand name 'FoodWorld' was initiated across the country, starting with Chennai in 1996. A new brand of hypermarkets called 'Giant' was started in 2001. However, due to business differences, the joint venture was terminated in 2006. Out of the 93 stores owned under the joint venture, RPG retained 48 of them, rebranding them as a new and refurbished Spencer's, while the HK-based partner retained the rest, continuing to operate them under the FoodWorld brand and even expanding over the years.
Resurgence and Rapid Growth
The termination of the joint venture in 2006 infused new thinking into the RPG-owned Spencer's, which innovated relentlessly to regain its once predominant position. The new Spencer's is known for its customer focus, fruitfully combining lifestyle aspirations with convenience to provide a unique shopping experience to consumers. Spencer's hypermarkets are designed to meet the daily, weekly, and specialty shopping needs of consumers. One can find various specialty sections in these hypermarkets, which have made them popular. Today, Spencer's operates more than 200 stores across 35 cities in India, under two formats: convenience stores and hypermarkets.
Spencer's success can be attributed to several factors. Its emphasis on quality and product spread, its innovation strategy, promotional tactics, and intelligent brand marketing have created an example that larger, more cash-rich, and new-age retailers are keen to emulate.
From India, Bengaluru
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CATEGORIES: RETAIL MANAGEMENT
Supermarkets and hypermarkets are ubiquitous in India's urban landscape today. Originally concentrated in the central business districts of Tier-1 and Tier-2 cities, these retail formats can now be found in every neighborhood and city across India.
Like most Indian industries, the origins of retail can be traced back to the British Raj. In 1863, two British acquaintances, John William Spencer and Charles Durrant, who worked as auctioneers and commission salesmen, started the first store on Mount Road in Chennai. Originally called Durrant & Spencer, the exit of Charles Durrant in 1867 led to a name change to JW Spencer and Co.
Laying the Foundation for Retail-Centric Thinking
The period between 1867 and 1920 was one of slow growth, during which John Spencer spent most of his energies building a large supply network of traders and merchants across undivided India.
In 1920, Spencer's became the first grocery chain in India to stock a large range of products under one roof, priced at rates comparable to neighborhood kirana shops. Long before the Costcos, Walmarts, and Targets of the world took root in the US and spread across its vast boundaries, Spencer's was already a large chain of stores extending from Karachi in the West to Chittagong in the East, from Delhi in the North to Tuticorin in the South.
The Need for Partnerships in Independent India
Post-independence, growth was slow again. The British owners of the company, who had by then relocated to the UK, apparently found it difficult to navigate the complex labyrinths of policy in India's license Raj. Additionally, retail was not considered an important industry and was not given a policy boost. Despite the ambiguity, Spencer's started the first supermarket chain in India in 1980. By now, Spencer's had become a ripe target for acquisition.
In 1989, the R.P. Goenka group, a prominent business conglomerate in India, acquired a majority stake in Spencer's, opening up a new chapter of growth. In 1995, a technical assistance agreement was signed with Hong Kong-based Dairy Farm International Holdings Ltd. Accordingly, a new chain of supermarkets under the brand name 'FoodWorld' was initiated across the country, starting with Chennai in 1996. A new brand of hypermarkets called 'Giant' was started in 2001. However, due to business differences, the joint venture was terminated in 2006. Out of the 93 stores owned under the joint venture, RPG retained 48 of them, rebranding them as a new and refurbished Spencer's, while the HK-based partner retained the rest, continuing to operate them under the FoodWorld brand and even expanding over the years.
Resurgence and Rapid Growth
The termination of the joint venture in 2006 infused new thinking into the RPG-owned Spencer's, which innovated relentlessly to regain its once predominant position. The new Spencer's is known for its customer focus, fruitfully combining lifestyle aspirations with convenience to provide a unique shopping experience to consumers. Spencer's hypermarkets are designed to meet the daily, weekly, and specialty shopping needs of consumers. One can find various specialty sections in these hypermarkets, which have made them popular. Today, Spencer's operates more than 200 stores across 35 cities in India, under two formats: convenience stores and hypermarkets.
Spencer's success can be attributed to several factors. Its emphasis on quality and product spread, its innovation strategy, promotional tactics, and intelligent brand marketing have created an example that larger, more cash-rich, and new-age retailers are keen to emulate.
From India, Bengaluru
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