Standalone supermarket stores that are not part of a multi-city or local chain of stores comprise over one-fourth of FMCG sales through modern format retail outlets. Defined as single self-service stores, standalones are an important supermarket store-type within the modern Indian retail environment. An ACNielsen India study indicates that higher penetration and customer relationships are a driving factor.
Standalones stock more premium products than other supermarket store-types on an average. Analysing the data for 28 urban Indian cities reveals insights into the development of the retailing landscape. While traditional retail formats such as kirana stores, grocers, paan outlets etc. still hold sway, modern retail formats are growing in importance for the FMCG marketer due to the range of products that they stock and the high average daily sales per store of FMCG products.
Some urban Indian cities however, appear to enjoy a higher than average contribution from Standalones. In cities like Delhi and Lucknow, more than half of all FMCG sales through supermarkets come from Standalone stores. In smaller cities like Jaipur, Varanasi, Chandigarh and Patna, the absence of multi-city chains results in all FMCG sales through standalones. Even areas like Chennai, which have a healthy presence of multi-city and local chains, witness a 50% contribution from Standalones.
“Standalone stores are able to attribute their large contributions to their geographical placement since they reach over 40 per cent of the purchasing population. Moreover, Standalones go at lengths to service consumers within their catchments, with a higher percentage of these stores offering telephone ordering and home delivery,” notes Sujit Das Munshi, Executive Director, ACNielsen India.
While Standalones reach a greater number of consumers, they present an interesting challenge for marketers in terms of visibility. The average shelf space per store at 1896 sq. ft. implies that their smaller size does not restrict them from displaying more categories and brands. Compared to the 122 product categories stocked by the average supermarket, Standalones stock an average of 126 product categories. “Combining this with the fact that the average number of customers visiting Standalone stores per day and the average spend per consumer is lower than the average supermarket, means that products and brands have to compete much harder for the consumer’s rupee within this store format,” adds Munshi.
For the marketers of branded packaged goods, this means that their in-store promotions and point-of-purchase material will need to play a more effective role in stimulating off-take within this modern store format.
“Standalone stores are not mere up-gradations of the grocery stores within a locality. They do not restrict themselves to just FMCG products, which makes it easier to cross promote brands through cross-selling schemes, but also have a healthy stock of premium FMCG products,” observes Munshi.
Premium FMCG products are well penetrated in Standalones, with some premium food categories and women’s toiletries registering a higher penetration compared to other supermarket store-types.