India's largest publicly-owned retailer, Pantaloon Retail (India) Ltd., this week opened its very first upscale, gourmet food store or bazaar in Select Citywalk mall, a new upscale shopping mall in south Delhi.
The new market is called Gourmet Food Bazaar. It's 4,500 square feet and is packed with gourmet, specialty and natural foods and groceries from all over the world. the format is targeting consumers' who've developed a global palate, and who can afford to indulge that palate because they have relatively high-paying jobs.
India has the second-fastest growing economy in the world after China. However, it has a far-higher percentage of college educated professionals than China, including millions of professionals who work in the country's high-tech industries. India has the fastest growing high-tech sector in the world. High education level is a key consumer variable in specialty foods purchasing and consumption.
With its first Gourmet Food Bazaar store (other new stores in the format are planned for Bangalore and Mumbai, plus more stores in New Delhi), Pantaloon Retail (India) Ltd. is betting the fast developing country is ready for a chain of upscale, high-end gourmet/specialty foods stores.
"We believe in food. And there is a customer (in India) that is ready for more lifestyle shopping, more branded items and more international cuisine," says Damodar Mall, the retailer's director of new business ventures, in explaining the creation of the company's gourmet food store format.
Pantaloon Retail (India) Ltd. is a huge, multi-format retailer. The company operates more than 1,000 stores in 51 cities in India. The company's retail formats include Food Bazaar, a supermarket chain (and now Gourmet Food Bazaar, the upscale division), Big Bazaar, a chain of hypermarkets, Pantaloons, a fashion outlet chain, and many more formats, including the home store and electronics categories. (You can read more about the company and its many retail formats here.)
Mall said the company doesn't presently now know the total number of Gourmet Food Bazaar stores it will open. However, he says there will be numerous gourmet stores opened over time, based on when and where the retailer feels they will do well. In other words, the gourmet stores are a venture, rather than a mere experiment.
Gourmet Food Bazaar is a division of Food Bazaar, which is a chain of supermarkets that offer a wide selection of products at discount prices. The Food Bazaar supermarkets are a unique blend of India's retail bazaar tradition and the modern western supermarket.
The gourmet and specialty foods' format stores will be a bit more western in their design and merchandising than the supermarkets. But the stores' will still retain such Indian food traditions as displaying assortments of bulk food products out in the open in a "touch-and-feel," "bazaar-like" manner. This tradition will be offered side-by-side with numerous packaged goods and other foods from all over the globe.
In addition to its numerous retail formats, Pantaloon Retail (India) Ltd. also operates a number of food-service type formats. These include: Brew Bar, a bar/pub with a neighborhood feel, Cafe Bollywood, which offers Indian street food with an upscale twist, Chamosa, a restaurant chain that specializes in the Indian snack combinations of tea and samosas, and Sports Bar, a sports-themed bistro. These retail operations are part of the company's foods group, along with the Food Bazaar supermarket chain and now Gourmet Food Bazaar.
India and its fast-growing economy, prospering upper class, and growing middle class, is ripe for new food retailing innovations and formats, ranging from the the upscale, small format-style of Gourmet Food Bazaar, to the hypermarkets of France's Carrefour and the supercenters Wal-Mart is building with an Indian partner.
A recent report released by consulting firm Ernst & Young says food and grocery products account for around 54%, or about $152 billion (U.S.) of India's total retail sales. However, modern style supermarkets, hypermarkets, supercenters, gourmet stores, natural-specialty stores and other western-style formats, account for only a tiny 1% of that total, according to the report.
Obviously, Pantaloon Retail (India) Ltd, along with dozens of other retailers based in India and throughout the world (like Wal-Mart and Carrefour) see this huge market and are moving on the opportunity.
In fact, Pantaloon Retail (India) Ltd. won't be all by itself for long in terms of building a chain of upscale, gourmet food stores in India. Another Indian retailer, Mumbai-based HyperCity Retail Pvt. (India) Ltd., which operates a chain of hypermarkets, is planning to launch its own gourmet and specialty foods format food store in 2008.
Hypercity's format, called GourmetCity, is based on the success the retailer has had with a gourmet kiosk it runs in one of its hypermarkets in Mumbai's western suburb of Malad. The gourmet kiosk or counter offers imported cheeses, handmade chocolates, upscale deli goods, fresh baked breads and sweets, marinated meats, and stocks gourmet and natural groceries from upscale British grocer Waitrose's store branded line specialty, gourmet and natural products.
The popularity and success of the gourmet kiosk encouraged HyperCity to create the GourmetCity format, and launch the first store in the chain next year. it plans to merchandise an extensive line of imported groceries in the gourmet markets, along with fresh foods, meats, fresh bakery and other upscale features. The stores' also will stock natural and organic foods from throughout the world.
India offers a huge opportunity for European and U.S. specialty and natural foods manufacturers and marketers. It's especially the case since those brands that get in on the ground floor of this "quiet gourmet food store revolution" will reap the dividends of brand loyalty as the format booms in India, which it will.
Along with its fast growing economy, superlative higher-education attainment levels, prospering upper class and growing middle class, India also is a democracy. And unlike China, it has a much longer history of doing business deals with western democracies, based on its years as part of the British Empire.
The peoples of India also are traveling more and more. In fact, there's a large international class in India. It includes numerous business people and academics who spend lots of time in the west. It also includes many residents who have family living in Europe or the U.S., attending school or working. These people are well-exposed to the west, and bring back ideas about different foods and products they've tried in their travels, and want to be able to buy regularly in India.
India is positioned perfectly for both retailers to launch their respective upscale, international gourmet food store formats--Gourmet Food Bazaar and CityGourmet. Blending the new--international gourmet, specialty and natural foods and groceries--with the old--India's "retail bazaar" merchandising tradition--will allow these retailers to appeal to India's consumers with a local as well as global approach as they grow these formats into regional and perhaps even national chains over time.