Made in Madras 2025

On 4 June 2001, I formally began my first job as a Retail Management Trainee with India’s first organised retail chain, the RPG Group. 

On the first day at work, I recall vividly riding in my humble TVS Max 100 R motorcycle from home to Spencers Plaza, where the HQ was located. 

I had been there before, countless times, but as an onlooker, as a consumer business enthusiast and a window shopper at best. Little did I know, that I would end up working in the same building one day.

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25 years later, on 31 Aug. ’25, I had the chance to host an interesting evening with a handful of doyens of the Indian Retail Industry’s eponymous journey – spanning as late as 1859.

Miles2Go Consulting Services, the Management Advisory firm that I founded in 2014, hosted its first ever event on Retail, as well as to celebrate “Madras Day” – the date of 22 Aug. when the city of Madras was officially created.

What began as a seed of an idea, grew into a full-fledged, power packed event, with 8 powerful speakers spanning over 150 mins, with just 3 weeks of preparation.

Mr.Mahalingam Balasubramaniam and Ashwin Balasubramaniam, Directors of Mangathirth Estates, the promoters of Spencers Plaza spoke about the glory of the place and how it all started.

The connection between Retailing and the erstwhile Madras that is called Chennai today, dates back almost two centuries behind us.

The first ever full-fledged Department Store – “Spencers”, offering Food & Grocery products once upon a time stood here – where the mall is now located, as early as 1859. 

This was a time when the gloried Harrods was not even in existence in London, the seat of the Queen and the East India Company!

Mr. Balasubramaniam spoke about how the mall was once upon a time, the largest building in India and was also the largest mall in all of Asia, during the late 90s.

In the next session, Mafoi Mr. K. Pandiarajan, Chairman & Managing Director CIEL HR, spoke about the hiring trends during the 90s and early 2000s in a candid chat with Prof. Giridhar Ramachandran, Ph. D., Associate Dean at XLRI Jamshedpur. 

He also stressed about the great opportunity ahead of us for young professionals in the Indian Retail Industry.

During the Panel Discussion about the great transition of retailers and customers from the 20th Century Madras to 21st Century Chennai, Ms. Thangamalar Jaganath, Managing Partner, Vasanth & Co., spoke in detail about her Late father, Mr. Vasanth, the founder of the Consumer Durables chain and the discipline that he instilled and the processes he brought in to the business, due to which the company has not just scaled over the years, but also grown leaps and bounds.

Mr. Harris Abdulla MK, the Founder of Fruit Shop on Greams Road shared about the first organised and formal juice shop of Madras during the early 90s, the hardships that he faced and what it was to convince consumers to pay for high quality, fresh fruit juices.

Mr. Balachander R, Director of the Biriyani chain Junior Kupanna spoke about team management, retaining and hiring staff, ensuring operational SoPs and most importantly, how Chennai remains the Biriyani Capital of India.

In the final session of the day, a tetè-á-tete with MS Bharath, Lawyer, Supreme Court of India and Founder, KRIA Law, Vummidi Mr. Balaji, Managing Partner of VBC Jewellery spoke about transitioning legacy over 125 years, ever since the Vummidi House of Jewellery came in to existence in the year 1900. 

In the grand finale of his chat, he spoke about how the glory of the SENGOL was discovered by well wishers two years ago, the interesting tid-bit that was passed on to the Hon’ble Prime Minister of India and eventually, the new Sengol – a device passed on from one ruler to the other during the days of the Chola reign in Southern India – was placed at the new Parliament building in New Delhi last year.

We were humbled and honoured to present our first “Lifetime Achievement Award” to the House of Vummidi at this event, as a mark of respect to salute the brand which has been a stupendous inspiration for over 4 generations of entrepreneurs. 

It was a momentous occassion for me, even as I stood in surprise, silence and satisfaction that a young boy who went about buying his first ever pair of denims from the Levis Store that once operated from this mall, with money earned from part-time gigs during the college days of 90s, was now grown up enough professionally to organise such an event of yore!

Interestingly, not only my first professional role, managing operations at RPG Retail’s Musicworld Kolkata & later at Foodworld stores across Chennai originated here, but also the interview and the confirmation for my second job with Pantaloon Retail (later The Future Group) also happened at the same building at the Pantaloons Store.

As I always say, even as I germinated in my mother’s womb over 4 decades back, my professional life began at Spencers Plaza, which for me is as sacred.

Cannot thank my Almighty, my parents, my family, my friends, former and current professional colleagues and well-wishers, without who’s support I would not have been standing on this stage today to celebrate Retail and my lovely city, Madras aka Chennai.

I would like to sincerely thank M/s Mangalthirth Estates, BESPOKE, a premium gent’s salon from Naturals, Brown Tree, Kesar Gifts, IBC Tamil and KRIA Law for their unstinted support in conducting this event. A special mention to all the staff of M/s Mangalthirth who gave their best for the sake of the event’s success. 

This is the first of many more events to come. 

Do visit www.MilestoGo.in, even as we aspire to become the first ever Management Consulting Firm in India to go public by 2030. 

We have, after all, Miles to Go…

Happy Birthday Madras - the Retail capital of India

I have always argued that one of the reasons why the British traded with our country for a long time was our ethical business practices coupled with abundant natural resources which have been bestowed on our land for centuries. Tracing India's roots to King Ashoka's reign or to the fledgling empires of the Chola Dynasty, trade was a very important aspect of the way India has been governed. While the fabric of the Indian ecosystem, spread across the length and breadth of the sub-continent cannot be taken away, there is a strong link to the very first organised retail establishment which was set-up by the British towards the end of the 19th Century in the erstwhile Madras. 

The Spencer’s Store and Higginbothams Bookstore, which are still edifices on the city’s famed Mount Road are over a century old. The current structure of the book store, once eponymous with everything books and which boasted customers such as Clement Atlee, former British PM, Shri C. Rajagopalachari, the former Maharaja of Mysore among others, was rebuilt to suit the needs of a sprawling bookstore in 1904. Mr. Abel Joshua Higginbotham arrived first in the city in the early 1840s. Over time, he purchased the Weslyan Book Shop run by Protestant Missionaries in Madras and renamed it with his own. He was the Sheriff of Madras in 1888 and 1889. After his death in 1891, his son, CH Higginbotham ran the company from the turn of the century until 1925 when John Oakeshott Robinson purchased the company and ran it until India’s independence. Subsequently, it was acquired by the Amalgamations Group and is managed by them, till date. 

Spencer’s as we all know, was set-up in the city in 1863 by Mr. John William Spencer. In 1895, the then largest Department store in the continent with 80 departments was constructed and inaugurated to the use of public, mostly the British. The store had a large number of imported items which came in Ships from Britain and all over the world for the comfort and use of the Brits living in the Madras region, one of the largest and most important bases of the Queen’s Establishment. Over time, the company changed hands many times until it was acquired by ace Indian businessman RP Goenka in the 1980s. 

India’s first FDI in Retail was by the RPG Group with Dairy Farm International, Hong Kong in the mid-90s which lasted for a decade and a half. The first “Foodworld” store was set-up at RA Puram in Chennai where I was a Store Manager early in my career from 2002-2004. After the JV ended, the RPG Group (now RP-Sanjiv Goenka Group) renamed it as Spencers. The place where the first Department Store in India was established in the 19^th Century now houses the eponymous Spencers Plaza, which was rebuilt after a major fire in the 1980s. I have vivid memories of visiting the older plaza where a number of films have been shot at.

Pic Courtesy: Viveks.com

The city has many notable brands which are now popular not just in India but across the world, be it retail chains or FMCG Brands. Viveks & Co., one of the pioneers of Consumer Durables retailing, was set-up in the year 1965 at Mylapore, Madras. Giri Trading, a retail chain which specialises in selling Hindu spiritual & puja related products has an established presence in the US, the UK, Europe, Middle East, South East Asia and Australia. Ambika Appalams, a favourite snack food brand which has now grown to become a neighbourhood retail chain has fans and followers all over the world and exports their goods to over 50 countries worldwide. Butterfly Home appliances, a pioneer in kitchen related items and TTK Prestige, have a pan-India presence today with huge levels of customer interest online and offline. New age apparel brands like Basics Life and Indian Terrain have gained international acceptance of their designs and styles and have been well appreciated by western counterparts. On the food front, Hotel Saravana Bhavan was a must visit for those visiting the town, now replaced by Sangeethas and Adyar Anandha Bhavan. And on the entertainment front, Sathyam Cinemas was the first regional stand-alone multiplex chain to expand across the country. 

There are numerous examples of Retail glory that my Madras boasts of and I shall remain eternally grateful to the city which has given me an identity and beyond. 

HBD Madras. 

Would Pricing alone entice Customers?

This is my 21^st year in Retail and I am still not amused that the Indian consumer’s love for discounted prices has never waned. Back in the late 90s when I first encountered a modern Retail outlet at Mandaveli at South Madras where my mother sent me to check out the new Store since the Sugar that was sold there was cheaper and of better quality than at the Ration Shop we would buy regularly, I was quite amazed at the whole set-up. It was a nice shop on RK Mutt Road with a bold red signage and white font which read “Subiksha” meaning prosperity in Sanskrit language. That the Indian Consumer has been price-conscious is known, but what’s interesting that almost all products in the country is today is sold at MRP – of course there are exceptions.  In categories like Electronics, the concept of Maximum Retail Price is just for Statutory Prices – to satisfy the Tax authorities. It’s been more than a decade since Electronic items were sold on MRP, barring new releases of Mobile Phones – Apple retains MRP for quite a long time since launching new product ranges while most other Brands cannot and do not retain MRP for more than 2 weeks since launch. 

In Fast Moving Consumer Goods (FMCG), MRP has always existed and will remain so, thanks to the MRP Act which governs pricing of consumer products. However, most Retailers of all sizes – S, M, L or XL or XXL (pun intended) offer or atleast promise to offer products below MRP. Subiksha’s initial success was due to a Brand promise that “Every product was priced below MRP” including Medicines which was an instant hit. The Retailer carefully priced products a rupee or more below – but at least One rupee lower than MRP which was a rarity those days. Even Kiranas wouldn’t reduce so much from the price of products, however would offer credit to consumers which was the first example of ensuring “Customer stickiness” a buzzword today. Over the years, most other Retailers have played on the Price and used it to their advantage. India’s first organized Grocery Retailer Foodworld had exciting price-offs on special days and this would draw crowds to the stores. Foodworld also launched Private Label products – “different cover, same product” which was cheaper by 10-20% across Spices, Ketchups and so on. A few years later, Food Bazaar came up with the premise of EDLP, a term coined originally by Sears in the 1960s USA which was popularised by Wal-Mart later on. 

Every Day Lower Price by Food Bazaar meant that there was no need for the consumer to worry about price change gimmicks; prices were low every day on a whole lot of items which kept / and keeps driving footfalls to the stores till date. On 26 Jan. 2006, Big Bazaar celebrated “Maha Bachhat Day” or “Big Savings Day” which was sort of similar to Black Friday and Thanksgiving weekend shopping in the West. The result was overwhelming and the Retailer has steadily increased it to 3-4 days now culminating with a weekend. In 2012, Flipkart ran “Big Billion Day” which was a runaway hit while also upset thousands of customers because they couldn’t get their hands on many products which were sold out in seconds and the delivery of products took more time than usual. Proof, that Indian consumers are extremely price-sensitive and will embrace price offers all the time. While this article is mainly focussed on Grocery, the competitive / discounted pricing works for every other product that’s sold in retail – from Agarbathis to Audi Cars, Furniture to Apartments (sans GST, as they advertise!).

I happened to visit D-Mart at Salem in Tamil Nadu, India this week. I have visited one of their outlets in Mumbai 8 years before while exploring setting up CCD within their premises. I was awed by their offering. Almost every product was on discount – below MRP to be precise. No crazy promos, no confusing promotions, buy this and get that and so on. Simple, straightforward discounts as we Consumers like it. In no time, I was carrying a basket and when I went to the Billing counter, I was informed by the girl I was to pay Rs. 901. Unbelievable that I picked so many things. But frankly, there was more to do than pricing which stuck me – the store was spic and span. For a grocery cum Hypermarket in a Tier 2 town with a population of less than 20 lakh population, that was surprising. The girl, when I asked said the store was seven months old and is filled up to the brim on the weekends with Customers shopping till late in to the night after the city is shut. Says something about us.

We are Chennai…

It was long pending but took a drive all the way up to the latest entrant in Chennai, the newly opened (partially though) VR Chennai, a Retail Centre spanning over 6 lakh square feet (in the first phase) adjoining the outer ring road, just outside the acceptable (hic!) city limits.  Planned and executed by Virtuous Retail, a Mall Management Company which has its Mall's presence at Surat, Bangalore and Punjab, the Centre is almost an oasis, what with a fantastic spread of Retail, F&B and Entertainment Opportunities in the anvil. 

The Mall is located north of Koyambedu, west of Anna Nagar and just after the Arumbakkam flyover. That this place existed for a huge strcture such as a Mall to come up came us a surprise to many in the city including a lot of Retail Professionals. 

So why does Chennai need yet another Mall while the existing ones are not providing double digit returns to Retailers? Why yet another Multiplex while the number of cinema goes has been steadily decreasing over the years, thanks to alternate entertainment options such as OTT Apps? Why should Brands invest heavily in yet another Retail  experiment (of sorts) while the existing Retail spaces are yet to be fully sweat?

Frankly, I have no answers on behalf of the whole of the Retail Fraternity. But here are my observations.

Chennai has historically been a high-street market, despite the so-called evolution and revolution of Malls and Shopping Centres in India since 2006. One of India’s first shopping centres came up at Chennai in the late 1990s – the iconic Spencers Plaza. It was a welcome break for shoppers who would otherwise throng the likes of T. Nagar, Purasawalkam fraught with heat and humidity while Spencers (as it was nicknamed) was the first a/c mall in India (Crossroads was just coming up in Mumbai but had entry restrictions while Ansal Plaza in Delhi was non A/c). Spencers was a super hit from day one with the second and third phases coming up in bursts but that’s when the High street Market continued to dominate and thanks to a property-ownership model at Spencers, leasing larger spaces was a challenge. And the mall slowly lost its sheen.

For a city of its size, there are just three malls of a reasonable size & scale -  Express Avenue, Phoenix Market City and Forum Vijaya Mall which together have about 20 lakh soft of actual Retail (minus the Cinemas). Interestingly, these three Malls form a nice Triangle while seen on a Map. The earliest entrant City Centre (Mylapore) failed due its own inefficiencies while the Ampa Mall (Arumbakkam) did quite well in its early years and slowly added fatigue & monotony; A suburban Grand Mall (at Velachery) sitting on a gold mine lost due to internal challenges of choosing the right sort of Clients. Then there is a Marina Mall on OMR which is yet to take off fully while the Spectrum Mall at Padi is a non-starter. MARG, the construction to research conglomerate lost out on a fantastic opportunity with it’s Mall structure half complete and lying idle for more than 5 years. 

So why a new Mall now?

I personally think that this Mall is a breather for Shoppers to avoid the congested bylanes of Anna Nagar and its periphery and head to this wonderful premises instead where they get an equal share of shopping, dining & entertainment.  For Retailers, this is a boon come true of sorts. Reason: The city had expanded in the deep south on OMR a decade back; it expanded towards Tambaram five years back. However, the western suburbs have been neglected for long. With so many thousands of people heading to work all the way up to Sriperumbudur daily, there is a huge chunk of middle class settlement happening in this part of the city. Also, there are very few options where a discerning Shopper gets satisfied with variety which VR Chennai is sure to offer.

I hope PVR Cinemas open soon, with a slew of films slated to release starting with Kamal Hassan’s Viswaroopam in August all the way up to November when Superstar Rajnikanth’s 2.0 will release after the recent Kaala. Now the question is will they be able to fill the cinemas, especially with newer challenges every day.

Inventory Management

For any retailer, Inventory Management is about maintaining the right level of stocks at the right place at the right time. If this is achieved, then the Sales can increase by atleast 30-50%. Sadly, it isn’t so easy. The “Fill Rates” as they are called refers to the amount of stock level that’s maintained at the Retail stores. It varies according to formats, location, pricing strategy, etc. In Grocery Retail, a fill rate of 80% is considered to be healthy while in fashion, it is ideal to have 90% and above. It may not even be relevant in Gold Jewelry while in Consumer Durables, it is normally about the breadth of brands and models one carries.

I set-out earlier this week to buy some general merchandise for our new office. As always, I prepared a list and walked in to one of the oldest Grocery stores in the neighborhood. The first thing I asked – a dustbin, wasn’t available. Really? And then I asked for another thing, which wasn’t available. And then another thing and the same answer. This sends a very negative imagery about the store to the potential customer. In Retail, it is estimated that over 70% of customers always purchase more items than they had originally come to buy provided a wider range of items are available and also the Retailer maintains a level of excitement at the store. In just a few minutes, I knew how the store was being managed since products of the same category were kept for display in two locations inside the store! Really felt bad for the store and the Retailer Brand that there is scant focus on merchandising & visual merchandising. But the god thing was I also picked up something which caught my attention at the cash till, which I had not written in my list. Smart placement, I would say.

Soon, I reached out to another store closeby for purchasing the rest of the items – now this is the last thing that a customer wants to do – store hopping for essentials. And trust me, while e-commerce has chipped in to some extent in offering a wider range, even they haven’t been able to crack the Hyperlocal delivery where such products are delivered in the fastest instance. At this store, I picked up the stuff I was looking for, thankfully got what I wanted and bingo! Picked up a few more things which I hadn’t planned to purchase. Again, because it was displayed near the Cash tills.

Inventory Management at a Retail Store has been automated for well over 2 decades now, from running simple software solutions to implementing complicated ERP solutions from top IT Companies. Sadly, even then, the fill rates in India in the Grocery store business continues to be less than 60%, sending Customer Experience to very low levels. I would also say, Indian Customers have been very nice to Retailers by being lenient loyal to such retail stores, shopping frequently at the same store even though the Retailer provides a poor experience. When I try to analyze, it’s partly tech-related but more importantly, the attitude of the front-end staff make all the difference. If only they displayed the products that have arrived from the Warehouse and also send out feedback of what’s not available! Wishful thinking.

I reiterate that Retailers can improve not only their Sales but also their margins by managing Inventory better. But it is a discipline to be followed daily.

Shaswat Goenka–Hearlding new frontiers at Spencers Retail

 

After dabbling with various sectors in the Rs 14,000-crore RP-Sanjiv Goenka group for about a year, Shashwat Goenka, 23, son of group chairman Sanjiv Goenka, has taken charge of Spencer's, the retail chain, from April 1. In an interview with Namrata Acharya & Ishita Ayan Dutt of Business Standard, he talks about his personal mandate and the road map for the Rs 1,400 crore business. Edited excerpts:

What goal have you set for Spencer's?
I assumed the role of sector head from April 1. What is most important at this point in time is profitability; that's where we are all trying to go. That will be the focus for the coming year and the year after. Spencer's is aiming to deliver Ebitda (operating earnings) breakeven at a company level in the third quarter of 2013-14 and be Ebitda-positive on a full year basis in 2014-15. That's the overarching short-term goal.

Spencer's has missed its breakeven deadline quite a few times. What makes you think you would be able to achieve it?
Well, each time we have done better. We have achieved breakeven at store-level but company level is what we want to achieve.

How do you plan to get there?
We want to increase our footprint. We will go up to two million sq ft from 900,000 sq ft currently and will expand in the north, east and south over the next four to five years.
We will achieve it over the next few years. The other important thing, obviously, would be operational efficiency.
In terms of offering, we would look at increasing international foods and regional foods. Value-added fresh is one of the areas we would like to explore.

Doesn't the fresh segment have one of the lowest margins?
We have very good margins in the food business compared to our competitors. Margins in apparel are obviously much higher but our margins in foods are good.

Any new formats for Spencer's on the anvil?
We haven't thought of any. We want to grow in hypermarkets.

Is the rationalisation process for Spencer's over?
Last year was the rationalising and consolidation process. We have exited Pune. In the past two years, we have closed 65 stores. Now, we want to start growing and in the hypermarkets.
Earlier, we had hyper, super, daily and express stores. Now, we have hyper and dailies and a few of the old express stores are still functioning.

Why did you exit Pune?
We wanted to become stronger where we are. So, we wanted to focus on the north, south and east. After we get that strong, we will revisit the west.

Why do you think the response from foreign retailers has been muted, after FDI (foreign direct investment) has been cleared?
I think people are interested. They just want to figure it all out before they come in.

Do you see foreign retailers as a threat to Spencer's?
Walmart and its likes coming in will help us. We can learn a lot from them. Back-end infrastructure will improve. There are basic infrastructure issues in India, like roads. Also, cold chains or dairy chains, for instance, are not very well developed.

A lot of options were being explored at the back-end by retailers. Any progress on that front?
We are open to FDI at the back-end but we haven't been approached by anyone.

Spencer's was exploring the IPO (public share offer) option. When is it likely?
That's something we definitely want to do but right now, the focus is on profitability.

Would you look at getting into the cash and carry format?
We have not looked at it. We want to be profitable and then explore other things.