Superstores eye boom time ahead
Over 600 chain retail outlets expected in few years
Superstores are set to boom in the country as the current market players are planning to open several hundred more outlets in the next few years to cope with the rising demand from the consumers.
With a strong 15-20 per cent annual sales growth, about 30 companies with more than 200 outlets have already made foray into the industry since Rahimafrooz, one of the largest business groups in Bangladesh, introduced Agora, a chain superstore, in the capital a decade ago.
The annual turnover of the superstores now stands at around Tk 15.0 billion (1500 crore), according to Bangladesh Supermarket Owners Association (BSOA).
Hassle-free shopping environment, hygienic commodities, fresh vegetables, meat and fish at the supermarkets are earning appreciation of the customers, market operators said.
The supermarket biggies have attempted the massive expansion drive to attract the shoppers, who still depend on unplanned wet markets to buy their daily essentials.
They say that a rise in organised retailing would offer the consumers hygienic foods at competitive prices, compared to those offered by retailers in the kitchen markets, where commodities are sold mostly in unhygienic condition.
The rise in the number of supermarkets, according to analysts, will diversify the choices of consumers and boost their spending, so much needed for economic growth, while the wet markets will also improve quality and services following in the footsteps of supermarkets.
But a decade ago, the retail-level trade was in the hands of thousands of small traders in the wet markets and the grocery shops in cities and remained out of the focus of the big business houses.
The landscape began to change in 2000 when Rahimafrooz Superstores, operating Agora, moved in to seize a slice of the retailing and wholesale trade, which has been growing at 6 per cent, on an average, annually.
In the past decade, many small and big supermarkets made debut, successfully attracting middle and upper middle class consumers, a section of whom are gradually turning to chain stores from the wet or kitchen markets, superstore operators say.
Dhaka-based Agora now runs four outlets, Meena Bazar nine including seven in Dhaka, PQS five, Prince Bazar two, Nandan five and Swapno 70 including 30 outside the capital. Bangladesh Rifles (BDR) also runs 11 stores in the capital.
According to operators, more than 600 chain retail outlets are expected to be set up in the next five years in an attempt to attract more customers.
"It is a good sign. Expansion of outlets will boost consumer's confidence and help create a market for manufacturers," Niaz Rahim, president of BSOA, told the FE.
He said once the supermarket culture is established, the commodity prices also will stabilise.
The supermarket culture is playing a vital role in generating employment, with a single store providing jobs to around 50 people, said Mr Rahim. "The massive expansion plan by various market players will open the door for more employment opportunities."
Due to massive expansion of superstores, farmers will no more be needed to turn to the multi-level intermediation as they will directly contact the chain stores operators. "As a result, they will no more be cheated," Zakir Hossain, general secretary of BSOA, told the FE.
Mr Hossain lamented that they did not get the required assistance from the government, although they were paying taxes. "It requires Tk 60-70 million to open a small-size store," he added.
As planned, Agora will open about 80 outlets across the country in the next five years, Mr Rahim, also managing director of Rahimafrooz Superstores, said.
"Fresh vegetables directly collected from the farmers are one of the key reasons behind the increasing popularity of the stores in Dhaka," Mokhlesur Rahman of Agora, told the FE.
On the growth of the business, he said, "We've been trying to ensure customers' satisfaction from the very beginning. And our quality products also attract the customers."
With many more such stores springing up at important locations in Dhaka and other major cities, Agora is endeavouring to fulfill the everyday shopping needs of the urbanites through fair price, right assortment and best quality, Mokhlesur Rahman added.
In order to ensure an uninterrupted supply of products, Agora has developed a sourcing channel to collect fruits and vegetables directly from the farmers, he said.
"It's a business to connect consumers to better products and prices, and create a market for local manufacturers," Ferdous Khan Noman, assistant manager (Purchase) of Meena Bazar, said.
"We are going to set up about 60 more superstores in the next four to five years across the country," he said, adding Meena Bazar has already two stores in Chittagong and Khulna.
"We feel the customers are ready because of changes in their lifestyle, preferences and needs. We want to offer a neighbourhood experience to the consumers by opening more outlets," said a senior official of ACI Ltd, which operates Swapno.
With the recent opening of a total of 70 branches, ACI has diversified the retailing business. Now it plans to open about 500 stores in the country in the next five years.
Mamunur Rashid, marketing manager of PQS, said they are planning to spread the mega-shop business by opening three more stores this year and another 10 in the next two or three years.
The departmental stores with the main focus on food items -- ranging from a wide variety of fish, meat, vegetables to fruits, bakery, dairy and grocery items- also offer a vast array of other household, personal care and miscellaneous products.
Consumers can buy as much as nearly 20,000 products of different kinds from such a store, the operators boast.
Supermarkets have successfully made a breakthrough in the urban lifestyle with the idea of "all essential commodities under one roof." In the early days of the business, around 500 customers would visit a supermarket outlet daily. Now some 5,000 customers come to a store everyday, they say.
"I shop here because it gives a relaxing shopping experience, which traditional kitchen markets fail to offer," Farzana, a customer at Agora's Maghbazar outlet, told the FE.
Besides, every commodity is available in this mega-shop, she added.
"The supermarkets offer good services to working people who really find little time for shopping," Shelley, a school-teacher, a regular customer of Meena Bazar, said.
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Superstores eye boom time ahead
