The Hindu Business Line : Apna Bazar chain begins revamp exercise

Changing times
Revamp to ensure customer-friendly environment.
Apna Bazar launches three fixed deposit schemes to mobilise funds.
Ties up with International Co-operative Alliance, Japan.
Sends its managers to Japan for training in retail.

Mumbai , April 29

The 80-outlet strong Apna Bazar chain has begun a major revamp exercise that started with Mulund and Andheri in 2005, and has now moved to Vashi. Preliminary work related to designing of the Vashi store has already begun.

"We need to give the chain a contemporary look with props like air-conditioning, parking, enlarged product mix and above all, a customer-friendly environ," says Mr Mahesh Kambli, CEO of Apna Bazar Co-operative stores.

It is not the current crop of malls and hypermarkets springing up across the city that pose a threat to Apna Bazaar but internal issues, he adds.

Leading this list is inadequate funding as Apna Bazar operates on a limited share capital, enabling only a minimal profit margin.

Pricing strategy

One major factor here is the pricing strategy, says Mr Shankar Shinde, Assistant General Manager, Public Relations, Apna Bazar: "We operate on EDLP (Every Day Low Pricing) policy which allows for a profit margin of 10 per cent only, whereas malls charge their customers the MRP (Maximum Retail Price). This allows them the leeway to offer various discounts to their customers".

The Apna Bazar top brass admit the co-operative has been making losses for the past few years. In 2004-05, it posted net loss of Rs 2.98 crore on a sale of Rs 121 crore.

Deposit schemes

Apna Bazar has launched three fixed deposit schemes to mobilise funds.

A fixed deposit scheme that offers 8 per cent return for a minimum deposit of Rs 10,000, provided the deposit is good for a minimum period of 2 years.

The `Akshay' scheme that offers a rate of 10.80 per cent on a minimum deposit of Rs 10,000.

The `Apna Kharidi' scheme where the minimum deposit is Rs 5,600 and in return, that allows monthly purchase coupons of Rs 500 each while a deposit of Rs 11,200 where the monthly coupon is worth Rs 1,000 — both for a year.

The capital raised from these schemes adds up to over Rs 20 crore, it is learnt.

In bid to restructure finances, Apna Bazar is understood to be in the process of tying up over Rs 30 crore. Part of this is earmarked for renovation of the Vashi store and the rest for clearance of debts, computerisation of the stores and for providing VRS to its employees.

Meanwhile, Apna Bazar in a tie-up with International Co-operative Alliance, Japan, has sent a few of its managers to Japan for training in retail.

Fresh food category comprising vegetables, fruits, meat, poultry, and dairy products is the latest addition to Apna Bazar stores. Fresh food sales will touch 10 per cent this year from only five per cent a year ago. Food items account for 65 per cent of the sales at Apna Bazar while the rest comes from non-food items.

Apna Bazar, set up in 1948 by Mumbai mill workers to facilitate the supply of essential goods, has an equity capital of Rs 1.6 crore from 15,000 shareholders. With the retail revolution sweeping the Indian cities, Apna Bazar wants its share of the pie.

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