SPENCERS RETAIL LIMITED:

REPOSITIONING IN A
CHANGING RETAIL
ENVIRONMENT
Group 2

Krati Gugnani: 19PGDM160

Mahek Jindal: 19PGDM162

Sakshi Rungta: 19PGDM055

Sambhav Jain: 19PGDM183

Sristy Agarwal: 19PGDM199

Syed Zaeem Anwar: 19PGDM203

 Why is Spencer's changing the positioning of its hyper stores? What shopper group(s) is
targeted by new positioning? Who are the relevant competitors for the new positioning?
How is the new positioning being implemented at the store level?

The changing Perceptions, TG and Competitors Positioning at Store Level

TTW had a created a perception of a high end retail
store which was catering to the upper mobility class
A rather than the masses
This was evident as the stores lacked commotion
and the general ruckus that the Indian consumers
are quite used to
This was detrimental to the company as they wont
be in a position to serve the B and C class customers
The competition was also getting tougher as
Reliance Retail and Big Bazaar were expanding
rapidly
The brand came up with the 3 pincer strategy to deal with
the crises of perception amongst the B and C consumers
Introducing the Private Label Brands to leverage the high
quality perception
OPP introduced in entry price point for KVI’s and
Spencer's Private Labels which attracted customers from
competitors
KVI(Known Valued Items) were priced to compete with
Kirana Store Prices thus attracting price conscious
customers
 What is the financial impact of the new positioning?

Spencer’s was positioning itself for the Makes

Fine Living Affordable where they were moving
towards maintaining high quality image of
Spencer’s with a price that would attract value-
oriented customers. 

Volume of sales has increased but not

contributed by fruits and vegetables and staples
but from other categories.
During the first half of the fiscal year Spencer’s
had a turnover of 7140 million rupees with
expected annual operating revenue of 15000
million rupees.
 Has it been able to raise the store sales volume to compensate for the margin
decline envisioned under the MFLA strategy? How has the new strategy
affected the sales and margins of other categories that were not subject to
changes under the new positioning? How has the new merchandising mix
affected the margins for the categories?
• Store sales volume in fruits and vegetables increased only
by 1%, whereas margins decreased by 7%, not an effective
compensation
• Store sales volume in FMCG increased by 11%, margins
decreased by 1.38%, so able to compensate
• Bakery and liquor not subject to changes, yet their sales
volume has increased significantly
• Margins of staples decreased from 17.52% to 15%
• Margins of fruits and vegetables decreased from 19.4% to
12%
• Margins of FMCG decreased from 21.38% to 20%
 Given the results, should Spencer's commit itself to the MFLA positioning in this store and
other hyperstores in India? If so, how should the company leverage the research results to
adjust its merchandise plan and in-store communication strategies for better implementation
of the MFLA position?

To compete with Big Bazaar, Food Bazaar, and Reliance Retail in terms of monetizing on the Sec B & C
category customers who represent the future growth areas for organized retail, Spencer’s needs to commit
itself to the MFLA positioning considering:
(i) Sec B & C customers don’t see it as “their store” because it lacks the commotion & excitement they are
used to
(ii) (ii) It is perceived as an expensive store due to its international look & feel
(iii) Best national & international brands were kept on the store shelves giving it a premium look & presenting it
as a costly retailer.
To adjust its merchandize plan and in-store communication strategies, Spencer’s can focus on the following
points:
(a) Value-oriented positioning, i.e., retaining the high-quality features of the store but lower overall price level
(b) Striking a balance between the quality of the products and price
(c) By practicing aggressive pricing policy and stocking private labels
(d) By stocking a wide range and assortment of products including some with lower prices
 Considering the information given in the case about organized retail in India and the
population characteristics, how can you help Spencer's leadership develop a strategic
vision for Spencer's Retail Limited? Should Spencer's envision aggressive expansion, or
should it strengthen its localized presence? What are the growth areas - both geographic
and customer groups- into which Spencer's should expand? 

The organised retail industry shows very low penetration in India, and with the retail expansion its poised to be
better exploited
Customers liked the product quality and shopping experience, but were unhappy about pricing
Spencer's was lacking in the product assortment of low end product availability, good value for quality and price
promotions at a time when retail chains like Big Bazaar were offering the same
When the MFLA was implemented, majority of the customers had a perception that the store had improved
This was also evident in the faster churn in the FMCG assortment
Geography: Tier 1 and Metro Cities like Bangalore, Chennai, Pune
Strategy: More Private Labels coupled with Price Promotions