Wednesday, June 19, 2024

Small Town, Big Dreams: Jaylaxmi Super Market’s Evolution from Kirana to Modern Supermarket Chain

Must Read

The Bhojwani family, initially vegetable vendors in Sindkheda, Maharashtra, overcame a significant setback after the1984 assassination of Prime Minister Indira Gandhi. Undeterred, patriarch M.D. Bhojwani rebuilt the family’s livelihood by establishing Jaylaxmi Provisions Store in1986.

The store’s evolution from a kirana to a supermarket, expanding to towns like Shirpur and Dondaicha, exemplifies agile growth and quality commitment, showcasing the promising future of grocery retail in tier IV towns.

In 2020, the family achieved a milestone with a successful 9,000 sq.ft. supermarket in Shirpur, which generates Rs. 8 lakh in daily sales. Inspired, they transformed their original 1,000 sq.ft. Kirana store in Sindkheda into a modern 4,500 sq.ft. supermarket. The strategic move increased sales from Rs. 1.5 lakh to over Rs. 3.5 lakh daily, contributing to combined annual earnings of Rs. 35crore. Buoyed by their supermarket success, the Bhowanis have now launched their most ambitious project – a 13,000 sq.ft. hypermarket in Dondaicha– and plan to open seven new supermarkets in the next five years, signaling a positive trend for grocery retail growth in smaller Indian towns.

M.D. Bhojwani was once a thriving vegetable vendor in the small town of Sindkheda, which comes under Dhule district of north Maharashtra. He operated a prosperous business specializing in the transportation of chillies, potatoes, and various other vegetables throughout the region. Business was good and the Bhojwani family lived a contented life, hoping to expand their transport fleet and scale up the business.

At a time when the family’s business was doing well, it faced a devastating setback due to an unfortunate turn of events. On 31st October 1984, then Prime Minister Indira Gandhi was gunned down, which sent shockwaves reverberating across the country. In no time, riots and mayhem broke loose across different parts of the country, resulting in widespread loss of lives and property.

Caught in the pincer of violence was Bhojwani’s transport fleet, and in no time the family had lost all its commercial assets. “Our trucks used for transporting vegetables were destroyed and the entire business came crashing down. We had nothing left and stared at an uncertain future,” recalls Rohit Bhojwani, son of M.D. Bhojwani, and Partner, Jaylaxmi Super Market.

Opening a Kirana Store for Survival

A meeker spirit would have crumbled under the weight of the tragedy. But the senior Bhojwani was made of sterner stuff and refused to give up. Finding himself broke and penurious, he hustled around to set up a small grocery shop that opened in 1986. “My father picked up the courage to put back together the broken pieces of our lives by opening a small general provisions store in Sindkheda, measuring less than 1,000 sq.ft.,” says Rohit.

The small store was named Jaylaxmi Provisions Store and it stood as a tenuous connection between the Bhojwanis’ broken past and their hopes for the future. Through diligence, perseverance, grit, and forbearance, the senior Bhojwani succeeded in building a business that became the family bulwark for the next 34 years. Until as late as 2020, Jaylaxmi Provisions Store stood as a testament to the patriarch’s visionary acumen and his ability to navigate the capricious currents of the business world. Through economic ebbs and flows, the shop proved to be a bastion that not only weathered the storms but also served as the crucible in which the family’s dreams for the future were forged. It was within the modest confines of Jaylaxmi that the Bhojwanis found solace, stability, and the foothold on which they constructed a bridge from a fractured past toward the expansive horizons of their collective aspirations.

“For a small provincial town whose population even today is about 40,000 people, our store succeeded in building a sizable catchment of customers in Sindkheda. My father applied his business acumen to develop and build customer relationships and excellent customer service for the store, which quickly earned the reputation for serving quality products at very fair prices,” remarks Rohit who honed his retailing acumen through hands-on apprenticeship, actively assisting his father at the shop.

“I learnt that gaining credibility and earning the trust of customers in this trade can happen only by offering a consistent quality of products, offering personalized service, and by building a bond with the customers. These lessons were the foundational principles of our food retailing business,” avers Rohit. He adds that his father swore by those principles and they helped to build a vast fund of goodwill for Jaylaxmi Provisions Store in Sindkheda.

“In the small town, largely undeveloped, our kirana store stood out for offering first rate quality products at fair prices. In the ensuing years, after 1986, as the place started to see pockets of development, our store became something of a landmark and attracted customers from all parts of the town. People looking to buy quality products at a good price came to our shop to buy stuff and our business that had collapsed earlier not only revived in a new avatar but also began flourishing,” says Rohit.

By embracing adaptability and incorporating forward thinking business strategies, Jaylaxmi Provisions Store established a reputation for local engagement and personalized service. Leveraging its inherent strengths, the store not only withstood challenges but also experienced accelerated growth, successfully expanding its custom and business. Reflecting on this evolution, Rohit mentions, “As our provisions store’s business flourished, my father began exploring avenues for a transition into modern trade, recognizing it as the logical progression for the business.”

A New Journey in Modern Trade Begins

By 2020, Jaylaxmi Provisions Store was ready to shed its old skin and don on the garb of a fully modern supermarket. The year saw Jaylaxmi flaunt its modern supermarket sinews when it branched into the neighboring Shirpur town, some 20 odd kilometers from Sindkheda. The new and gleaming 9,500 sq.ft. Jaylaxmi Super Market opened to a rousing welcome from the public. “Shirpur is a more developed town than Sindkheda and is known as an educational hub in the region. Its over a lakh population has a fairly large proportion of educated professionals who took an instant liking to our new store,” says Rohit, who has taken on the mantle of being a Partner with his father acting as Managing Director of their new retail establishment.

With a wider and more urban-centric customer base to tap into, Jaylaxmi Super Market started to receive good customer traction from Day 1. “The first month itself saw sales averaging Rs. 3 lakh on a daily basis. Today, its sales are more than twice those numbers, reaching Rs. 8 lakh per day currently,” says Rohit. He alludes the impressive sales numbers to the mix of attractive schemes and offers that they put in place to excite and ignite the interest of customers.

Pulling Out All the Stops to Make the Supermarket Click

“As the first large self-service modern supermarket in Shirpur, people were an expectant lot and there was much anticipation built around the store. Thankfully, we too were prepared on our part to open on a high note, and more than meet the expectations of shoppers,” recounts Rohit. Much before the Bhojwanis opened their first modern supermarket in Shirpur, father and son had put their concerted efforts to learn the ropes of modern trade and acquire the learnings and knowledge that a modern trade business demands.

“We scoured many parts of Maharashtra and places elsewhere to learn firsthand how supermarkets were being run and which were the winning concepts and schemes that were a hit. Looking at the customer demographics in Shirpur, we tailored and customized many of those things into our own supermarket format, and luckily they hit off with our customers,” says Rohit.

Rohit recalls getting in touch with Chetan Sangoi,founder of Sarvodaya Supermarket in Mumbai, who is widely acknowledged as a guru and mentor to many young food and grocery entrepreneurs. “Chetan sir distilled this mantra into us: If you can keep the quality of your products inviolable and impart a great customer service to your customers that help them to maximize their benefits, they will always remain in your corner, come what may.”

Sandeep Sukhwani, a close relative of the Bhojwani family and also a Partner at JaylaxmiSuper Market, says that supermarkets have the ability to offer customers a multitude of incentives, discounts, cash-backs and gift coupons that kirana stores can’t. “So, we brought some of the most attractive offers that we had observed being run by successful supermarkets and put them into play at our store. For example, our store provides an array of incentives and discount coupons across various purchase tiers: Purchase goods worth Rs. 1,000 and receive complimentary gifts equivalent to a specified value; Spend Rs. 2,000 and avail free gifts with a determined value attached; Buy products worth Rs. 5,000 and secure guaranteed gifts commensurate with the expenditure. All these schemes and offers have been designed to benefit the customers and encourages them to shop generously at our store,” remarks Sandeep.

Likewise, at Jaylaxmi, a continuous initiative is in place, assuring customers who consistently patronize the stores throughout the entire year to earn a reward bonus comprising a free purchase commensurate with their 12-month spending average. Several comparable schemes are also consistently operational, allowing customers to optimize the value derived from their expenditures. Concurrently, an unwavering commitment to product quality remains a cornerstone, serving as the foundation for both maintaining and expanding a loyal customer base.

From a Kirana to Three Supermarket Stores

Buoyed by the success of their Shirpur supermarket, the Bhojwani family decided to remodel its original 1,000 sq.ft. kirana shop in Sindkheda as well. “Two years ago, we rebuilt our original store into a 4,500 sq.ft. supermarket and we have been pleasantly surprised by the turn of events. As the original shop already had its catchment of loyal customers, the shop’s makeover into a modern supermarket has been wholly welcomed in a city where finding a supermarket is still a rarity,” enthuses Rohit.

“We have seen sales at our modern Sindkheda supermarket rocket and a 100% growth jump from the time when it still was a counter-top shop. Daily sales in those days were about Rs. 1.5 lakh, which has now more than doubled to over Rs. 3.5 lakh,” adds Rohit.

With healthy earnings coming from their two operational supermarkets, the Bhojwanis were emboldened to venture further. This February month, the Bhojwanis have launched their third and most ambitious retail project to date: a 13,000 sq.ft. hypermarket in another nearby town of Dondaicha, which is at a distance of 20 km from Shirpur and Sindkheda. “Dondaicha has a similar customer profile to that of Shirpur but was lacking in quality retail spaces. We have now filled that gap by opening our hypermarket here and we hope it to do well just like our two older stores,” says Sandeep.

He observes that there’s a palpable shift in consumer preferences even in the smaller towns of India. “Despite the novelty of the self-service concept, these regions are witnessing a gradual evolution in market dynamics, with customers displaying a growing affinity for the convenience and diverse offerings provided by grocery supermarkets.”

Economic development in small towns has led to an increase in disposable income and changing aspirations. “Consumers in these areas are now seeking a modern shopping experience that aligns with urban standards. Grocery supermarkets, despite being a new concept, cater to these changing aspirations by offering a contemporary and well-organized retail environment,” he adds.

Unlocking the Secret Sauce of SupermarketSuccess

As local, regional, and national retailers vie to seize the prospects presented by modern trade in smaller towns, the grocery retail sector in these parts is also witnessing an intensified competitive landscape. “Quite a few other regional players have now entered the markets of Shirpur, Sindkheda, and other neighboring towns, including national players like Reliance SMART, but the business at our stores continues to grow,” says Rohit.

“Our top priority, given our foregrounding in kirana retail, is to first implement those things that offer maximum value and benefits to the customers. I am a firm believer that if you offer and pass on the maximum benefits to customers, nobody can stop a supermarket to be successful and become a darling of their customers,” he adds.

In catering to a middle-income customer base, Jaylaxmi prioritizes high-volume sales over higher profit margins. Rohit explains, “In these smaller, agriculturally influenced areas, residents are particularly value-conscious. Offering substantial discounts is crucial to meeting their needs. Notably, many teachers frequent our stores, and there’s a local saying that a store frequented by teachers is considered favorable by the general public.” Through strategic bulk purchases from FMCG brands, Jaylaxmi secures favorable discounts, which translates into savings for customers and contributes to an expanded customer base.

“To get customer footfalls at your store is an art on which any retailer has to work relentlessly on, and most of these new stores that opened up seeing our success, failed to work on that recipe. They thought that Jaylaxmi is seeing such great footfalls and we will be able to replicate that but it did not work out that way…so at least 3 newly opened stores have shuttered and while 3-4 such stores are still hanging on, we keep ourselves focused on delivering the best service to our customers and we are convinced that we will continue growing despite the entry of national players like Reliance SMART in the fray,” says Sandeep.

He notes that numerous retailers succumb to challenges amid the fervent pursuit of growth and customer acquisition. The pitfalls often involve indiscriminate discounting, leading some to compromise on quality and customer service in their quest for rapid expansion. “By consistently offering superior quality items, a retailer not only stands out but also fosters customer loyalty, elevating the shopping experience from transactional to exceptional. It is therefore critical for a retailer to acquire excellence in product sourcing and assortment, which can help build an enduring reputation for the retailer and position him as a trusted purveyor of top-quality goods in a market saturated with choices,” observes Sandeep, adding that a discerning retailer not only anticipates the ever-evolving demands of the market but prioritizes the curation of product assortment that transcends expectations.

Sandeep asserts that one of the key factors contributing to Jaylaxmi’s market success is the steadfast commitment to rigorous sourcing standards and the delivery of premium-quality products. The retailer sources spices and dry fruits from the APMC market in Vashi, Mumbai, which is the No. 1 sourcing market for quality dry grocery products in the region. “When it comes to other dry grocery products like pulses, we prefer sourcing them directly from the mills in Jalgaon, which is known as the hub of pulses in the whole of Maharashtra. We have a very professional team of suppliers to supply products of a specific quality that we choose and this way we have been able to maintain quality consistency of our products throughout the year.”

“Thanks to our painstaking efforts in sourcing only the best quality products and curating assortments that meet the essential and aspirational needs of customers in the region, Jaylaxmi Super Market remains the No. 1 food and grocery retailer in all the three places that we currently operate in despite many other retailers entering the fray in the past couple of years,” avers Rohit.

Introducing Non-Food Categories to Push Footfalls and Sales

With over 7,000 SKUs, Jaylaxmi stores stock and sell products in the entire supermarket category range. “Except for fresh produce and milk, our merchandise is spread across 29 product categories in both food and non-food. Oils, ghee, groceries, dry fruits and masalas contribute about 50% of our overall sales. In terms of profitability, dry fruits and masalas are the biggest contributors offering over 20% margins,” says Sandeep.

To accelerate footfalls and sales, Jaylaxmi also stocks a wide array of products in the nonfood category, which includes steel utensils, crockery, kitchenware, plastics, and home linen, among others. “One notable inclusion is the introduction of toys category in our stores. Many in the supermarket trade warned us not to foray into the toys section as toys are damage-prone and have a high incidence of spoilage,” shares Rohit.

Recognizing a discernible gap in the market, Jaylaxmi perceived a genuine necessity to incorporate toys into its product offering. Observing a scarcity of stores specializing in toys, the retailer believed it was essential to address this unmet demand and provide a diverse range of products to its customers “To avoid loss from damage, we source toys from only quality manufacturers in both Mumbai and Delhi and we have seen a huge response for this section at our stores,” reveals Rohit adding that the two stores in Shirpur and Sindkheda attract daily footfalls of at least 1700 customers on average.

About a year ago, Jaylaxmi also introduced the apparel category, apart from other new product categories like ladies’ purses, sports goods, and stationery. “All these new categories are doing very well and encouraged by the response we have recently added the footwear category in our stores as well,” informs Rohit.

Managing Retailing Challenges in Tier IV Towns

Getting on-time regular delivery from top FMCG brands poses a real challenge for retailers in Tier III-IV towns. “It takes a lot of convincing on our part to get the FMCG brands to respond. But once they are convinced about robust sales, they take notice and start distributing the products. Rural markets and rural consumption is critical to the business of major FMCG companies and they too are trying to push and bolster their distribution network in India’s hinterland,” points out Sandeep.

But supply chain issues continue to linger in some form or the other. “Securing timely deliveries of newly-launched products to our stores poses an ongoing challenge. Numerous FMCG distributors exhibit reservations about the market viability of their products in rural areas, hindering the establishment of supply lines to stores in these regions. Some distributors express reluctance in serving a limited number of stores in rural areas, questioning the effort involved. Additionally, challenges related to transport and road infrastructure further diminishes the enthusiasm of several FMCG distributors to supply products to stores in rural markets,” observes Sandeep.

He says that many top FMCG companies have still not been able to establish their distribution reach in these Tier IV towns, which poses a challenge for supermarket retailers here. “We maintain continuous communication with these FMCG companies, presenting our sales figures and footfall data, hoping to persuade them to extend their distributorship to our locations. However, this remains a persistent challenge for retailers in our region. Thankfully, we’ve have been able to successfully convince major FMCG companies like HUL and P&G to distribute their products through our stores. Looking ahead, we aim to replicate this success with other FMCG majors as they too are actively seeking opportunities to boost their sales.”

A Roadmap to Open 10 Supermarkets in North Maharashtra

Looking ahead into the future, Rohit says that Jaylaxmi Supermarket will soon open its fourth branch in Shahada, also in north Maharashtra and some 50 km away from Sindkheda. “Over the next 5 years, we plan to have at least 10 supermarkets under the Jaylaxmi Super Market banner.” Even as it is working on expanding its store network, Jaylaxmi is also focused on strengthening its tech infrastructure to enhance its customer outreach. “Currently, we are working on launching our own supermarket app, which is expected to become operational in the coming months. This will help to widen our customer reach and complement our in-store sales. As of now, we offer free home delivery service and accept orders on WhatsApp,” informs Rohit.

Emphasizing the integral role of technology in the seamless operation of contemporary supermarkets, Rohit underscores the indispensability of technological support, regardless of a retailer’s experience or operational efficiency. “In the current retail landscape, successful operation without leveraging technology has become an impractical proposition. Technology helps you to clock better and faster growth and in reducing shrink and other forms of wastage. All our stores are currently running on the latest ERP software, which has helped us to manage our inventory very smartly and replenish our stocks in a very efficient manner. It helps us to monitor our sales and detect the slow-moving SKUs,” points out Rohit.

When asked to elucidate how aspiring entrepreneurs venturing into the food and grocery retail sector can establish a profitable and sustainable business, Rohit emphasizes the focus of supermarkets like Jaylaxmi on a business model emphasizing high sales with thinner profit margins. He notes, “Our success lies in this approach, although there are supermarkets that prioritize higher profit margins despite narrower sales. The choice depends on the market dynamics and the entrepreneur’s capacity to efficiently manage their chosen model.”

Reflecting on his earlier remarks, Rohit underscores the proliferation of new stores in Shirpur after the inauguration of Jaylaxmi Super Market. However, he highlights a notable contrast as many of these establishments experienced closures within months, while Jaylaxmi has been able to sustain consistent growth in its business.

“Bringing the ethos of customer service, quality offerings, and developing credibility and trust with customers is a tall order but being focused on those values have helped us to swim the competitive waters of food and grocery retail,” signs off Rohit.

Latest News

D2C Success Secrets and Challenges on the Path to Scale

In the world of contemporary retail, D2C brands are rewriting the rules, disrupting traditional models, and carving out their...