Men buy, women shop

One of the better articles i have come across on gender shopping ways.

Men shop as hunters, women shop as gatherers

Men, who have often been accused of being merely replacement shoppers, tend to be more utilitarian when they hit the malls and shopping centers. It's a mission. Get in. Get what's needed. Get out. Quickly.

Women, on the other hand, generally like to look around, talk to sales associates and experience the shopping. They walk around, smell perfume, touch clothes, dab on cosmetics. They want attention and they want direction.

Men are very task oriented while women are very much more about the relationship and the engagement and the interaction with the people at the stores.
"Don't point me in the direction and say aisle 6," one man said during the study. "It's better if he takes me and says, 'There it is.'"

Women told surveyors that they liked it when associates showed them different styles and new items. "I told her what I was looking for and why and she set out to find me the right suit," said one woman. "I didn't have to do anything."

And this might not be terribly surprising either: Women run into more problems when shopping than men. On the tribulations scale, women's No. 1 issue was not being able to find help when they needed it. One in three women who were so miffed by the issue that they said they would never go back to the store again.

Men's biggest headache: Parking. One in three said they hated not finding parking close to the store entrance. But very few of them said they would desert the store forever because of it.

The clerk factor
Twenty percent of women said they were ignored by sales clerks, mostly because they thought the clerks were more interested in talking with each other about their weekend plans or were on the phone with friends. A whopping 47% of those women said they would never go back to that store.
"Being ignored is a big issue for women," Courtney said. "It's a loyalty issue."
Men ditch stores, too, but their biggest reason to do so is when products are out of stock. Men complained they experienced that when shopping 24% of the time compared with it happening to women 21% of the time.

But here's the real kicker: Of those men who complained, 43% said they would never shop at those stores again; only 16% of women cited that as a reason to stay away. Some people did go back to stores they vowed never to return to -- less than one-third, according to the study -- but it took them close to a year to do so.

Both men and women told that they really appreciated a "lack of pressure" when store employees were willing to let them shop at their own pace.

Age made a difference, too, in shopper loyalty. The younger the shopper, the more likely he or she was to pooh-pooh a store for poor service. The pickiest of all groups were men 18 years old to 35 years old. "I'm not going to tell them that they're messing up," one guy said. "Let them lose business. I just won't go back."

Women and men both are four times more likely to relay a good-news experience than a bad one.

Still, when all is said and done, women are the shopping queens. They spend an eye-popping $4 trillion annually, which accounts for 83% of U.S. consumer spending.

An approach to selecting a good location for a supermarket.

Location is amongst the most important or THE important criteria for selecting a supermarket. Because all other things at a retail premise can be changed viz. merchandise, prices, people, infrastructure, but one can never decide to go for another location as the cost involved is too huge or virtually nil for big supermarkets.

Some of the criteria for selecting a store location are as follows.

First it should have an immediate catchment of 2000-3000 customers. This is because these 3000 customers will be situated in the vicinity of 1- 1.5 kms, and a consumer will not travel more than a kilometer to purchase his daily grocery. This is especially true in the Indian market since every street has some kind of food retailer servicing that locality. The trading area for this particular store is from where 60-70% of the sales will be generated.

Stores are always profitable when on the main roads or the roads adjoining the main roads. This ensures that not only does it attract its core customer but also attracts fleeting population. The moment they see the store, consumers think that they have to do shopping and replenish their kitchen. Another advantage of keeping the store in the main road is that it can be easily found or its signage can be see easily from a far distance. This will promote impulse stop overs resulting in more walk-ins.

Not only should the store be in a good location but should be of an optimum size. The optimum size of a store for a supermarket should be between 4000-5000 sft. Lesser than 4000 will mean a less assortments and more than 5000 sft means losing on sales /s.ft. One does not want to have fewer assortments as this might make the consumer move to a different shop to buy his other needs whereas getting more than 5000 sft will mean providing too much more comfort to the consumer at the cost of profitability.

All other criteria being same, one should finally look into the sales that the store will generate to sustain the business.

Other than the above, conditions that determine the location of a good retail store is the presence of competitors in the vicinity. Technically no competition means the customer has no choice but to shop in one place.

But it has also been found in some cases that competition bodes well for the retail outlets. This is not very surprising as consumers will travel further if there are more stores to choose from when they get to a particular location. This idea is know as the principle of cumulative attraction.

Are hypermarkets only for the rich class?

The concept of hypermarket has always been low cost, wide range and depth in the western countries. But in countries like India, where property prices have been skyrocketing and with every retailer worth its value, entering the market, would it be the same?

I guess not. It would be difficult to position a hypermarket for the masses.A back of the mind calculation shows that to build a hypermarket you would need a space requirement of anywhere between 50,000 sft to 1,50,000 sft .Lets assume you want to build a 100,000 sft sized hypermarket, for that you would need 1,66,000 sft plot area equivalent to 65 grounds, assuming 60% ground coverage with an FSI = 1.
Assuming a ground costs on an average 3 crores in Tier � 1 cities, you would spend almost 195 crores in just acquiring the land. An additional 20 crores (assuming building costs at the rate of 2000/sft) would be spent on construction. Taking the total to 215 crores. (Scenario � 1)

In Scenario � 2, for the same 1,00,000 sft if we get an FSI equivalent to 2.5, we would end up paying 78 crores for acquiring land and another 20 Crore for building one. Taking the total to 98 Crore.















Assuming a hypermarket has most of the main categories viz a viz Food, Consumer durables, FMCG, apparel, Books, Music, Furniture, Home, Footwear. The weighted average revenues /sft generated would be around 14,000 sft/month. So the yearly turnover expected will be 140 crores(14000 * 1,00,000), out of which if we keep 25% as the margin with vendors, the margins expected will be 35 crores. Assuming 6% profit on sales (which is an optimistic figure after deducting COGS, staff, electricity, marketing, and miscellaneous expenses but excluding rent @ 4% of sales), the EBDITA will be 2. 1 Cr. Another major revenue for a hypermarket will come from selling space either through endcaps or through in store visual signage�s.

Assuming a hypermarket has 15 endcaps, they would generate approximately another 1 Crore (15 endcaps * Rs 50,000/endcap/month * 12 months). Another one crore would be generated through miscellaneous space selling. This leaves an EBDITA of 4. 1 crore / year for the retailer.A simple 9 - 12 % (depending on demand supply of money) bank interest in (Scenario � 1) alone will yield 20-25 crores a year.I cannot comprehend how hypermarkets will sustain at this rate but this is a secondary question for the moment, but given the stark scenario it would be wise for hypermarket developers to go in for a wide range of SKU�s but at the same time not too low on price.

The customer is already pampered with choice, variety, convenience, and therefore there is no reason why he should be getting rock bottom prices. By increasing the walk-ins and more importantly the average bill value one can cover the bottom-line.

Like I have mentioned in my earlier article disposable income is on the rise, consumers don�t mind paying a bit premium.

Do vegetarians pay more in a restaurant viz a viz a non-vegetarian

It looks to be true if you compare some of the rates at restaurant. For example if you took a sample of restaurants and compared the vegetarian and non-vegetarian item rates, overall the non-vegetarian rates will be 20% more than the vegetarian's rates.

But if you look at the costs of chicken which comes to be around 60 Rs/kg, Lamb Rs 200/kg, Fish 80-200 Rs/kg, the average comes to Rs 130/kg, whichever way you see, the rates are way costlier by almost 200% than you would need to make a decent vegetarian meal.

I guess restaurants wouldn't want to show that much of price differential for vegetarians and non-vegetarians. So if you are a vegetarian you are shelling out more every time you eat out.

Are Kirana stores losing their relavance?

A big yes, gone were the days when families used to wait for the start of the month to place their monthly purchases.

With spending power/consumption expenditure (disposable income � savings) on the rise, middle class India have the option to buy anytime of the month.

The advantages that that the kirana stores enjoyed viz. personalized service, door delivery, and personal touch have have all been lost with the advent of organized retailing. Organized retailing provides a number of advantages i.e. they provide variety, quality in terms of freshness, good prices, convenienence; these factors combined with the rise of disposable incomes have made a big hit with the burgeuing middle class population.

Note: �Kirana stores� is equivalent to a �Mom and Pop Business� The term "mom and pop business" is a common colloquial expression for a single-family operated business with few (or no) employees other than the owners.

Cigarette Economics

The MRP rate for gold flake kings (pack size 10nos) is Rs 34. The retailer sells it at Rs 3.50 per stick. At this rate the retailer makes 1 Re per pack. Assuming that this retailer sells to about 500 customers per day, he makes a profit of Rs 50. So what makes the retailer stock cigarette packets for such a low margin. Considering the fact that he could keep something which gives him more margins or in technical terms GMROF.

Big retailers on the other hand can afford to keep cigarettes, because he makes up for the cost through slotting charges. But a small retailer does not enjoy such benefits, so then what makes him keep packs of cigarettes.


I did a small research and found out what could probably be an answer to the question. It has been found that the consumption of cigarettes has been on the rise over the years. In 1980, it was 1250 per head per year, which makes it 3.5 sticks per day per person. In the year 1990 it rose to about 1800 sticks per head per year (source: World Bank report) which amount to 5 sticks per day per person.

In India a vast majority of the consumer buys cigarettes in singles rather than in packs, so if a person smokes about 5 sticks per day, he is bound to frequent the shop at least 3-4 times a day. So a retailer who sells cigarettes can also cross sell other merchandise at his shop.

Also India which has the highest density of retail stores about 12 million retail stores, and with 96% of the stores less than 500 sft, it makes sense for the retailer to pull in customers. So keeping cigarettes makes sense for him even though the margin he makes is very less.

Convinced / Not convinced, I will be happy to hear your point of view.