This case was selected from ‘Case studies in Retail Management, Volume 1, ICFAI

Centre for Management Research

Why this case?

Covers concepts related to

• Differentiation based on type of Retail Formats
• Pricing Strategies
• Private Labels
• Store Layout, Featured areas and Space Management
Introduction :

Background:

• In 1998, the Tata’s ventured into retailing, which was still in its nascent stages
by acquiring the Britain based Littlewoods stores and renaming it Westside

• This provided an established supply chain and trained personnel for Westside

• Type of Store: Department Store

• Position within the Market: Westside is positioned to provide style with
affordability to fashion conscious customers.
• Target Consumer: Westside targets fashion conscious middle and upper
middle class consumers.

• In 2001, Westside had average sales of about Rs5000 per sq ft. in all its stores
• In 2002, Westside reported a net profit of Rs.102.2 million and also reported
cash break-even
Introduction :

Venture into Food Retailing

• By the end of 2003, announcement of entering the food retailing industry was
made and planned to establish a chain of 100 grocery and food stores under a
new brand name within 5 years

• Announced that they would try to build their own brand in the food retailing
business but initially sell all brands
Issues addressed in the case:
Issues addressed in the case:

With the retail clothing industry predominantly unorganized, analysis of

the competition in the retail clothing and lifestyle products industry

Strategies recommended for Westside to position itself effectively against

the evolving competition including leading Indian business houses and
international players

Analysis if Westside should get into the food retailing industry or remain
focused on its current line of business
Reasons for Westside’s decision to sell its own brands rather than
established brands along with its advantages and disadvantages

• Would get more control over the manufactures, quality and distribution of its own
brand

• Eliminate intermediaries and saved on intermediaries’ commissions leading to

comparatively higher margins

• These savings were directly transferred to the customers by selling at much lower
prices thus reinstating its positioning, ‘Fashion at Affordable Pricing’

• Opportunity to stand out from the crowd

• Tested format since most international retailers had successfully implemented it

• Offers unique valuable product to the customer

Advantages : Disadvantages :
• Indian retailers suffered on account
• High returns
of poor economies of scale
• Increased store loyalty
• Heavy investment in brand
• Less restriction in terms of display,
building
price and promotion
• Established brands attract higher
• Control on quality
footfalls
• Adds value to the customer by
• Efforts go in generating demand
offering better products for lower
for the products
prices
• High in risk – potential failure of
• Number of players having their
the product if effective strategies
own private label is low
have not been implemented
• Control on scrap and wastage
Westside’s retail model: Retail layout, focus on market research and
customer feedback, positioning of its products, heavy advertising and
promotions

Private Labels Only

Leasing shop space (save costs on real

estate)

Focus on metro cities

Retail Layout:

Free form retail layout- Boutique layout (Overcome challenge of shortage of spacious
locations in metro cities)
• Fixtures and aisle arranged asymmetrically
• Spacious stores where merchandise displayed at 2 levels on a single floor
• Merchandise kept in separate clusters
• Space ranging from 10,000-20,000 sq ft
Westside’s retail model: Retail layout, focus on market research and
customer feedback, positioning of its products, heavy advertising and
promotions
Retail business:

• 2 main divisions: apparels and products division

• Every store had a stocking of about 30,000 SKU’s
• Centralized buying
• 63 days old stock days

Positioning:

• Value for money

• Value innovators: High quality for lower price

Products :

• Placement: Focus on consumer’s comfort with pleasing store ambience and convenience
• Product Categories: The company provides private label and branded products. – Menswear
(casual and formal) – Women’s wear (Indian and western) – Kids’ wear – Footwear – Cosmetics
– Perfumes and Handbags – Household Accessories and Gifts
Westside’s retail model: Retail layout, focus on market research and
customer feedback, positioning of its products, heavy advertising and
promotions
Focus on market research and customer
feedback

• High focus on market research with an in-house team of 5

• Carried out market analysis while entering a new city

• Studied the demand potential, buying patters, purchasing potential, car ownership and lifestyle

• Also approached established companies for consumer details

• Customer centricity: Expressing trust in the customer and focus on listening to the customer
for product enhancement
Analyzing the strategies contributed critically to the success of Westside
and how far are the advantages sustainable in the long run

Suitable Merchandise mix

• They are catering to different age groups under one roof

• This way they are able to build a huge customer loyal base. They have bed sheets,
kitchenware, jewellery, perfumes, baby products, household items, etc. This way a
customer who enters Westside just to buy one or two items usually ends up buying a
lot more. Stacked up to 30,000 SKU’s providing a wide merchandise mix

Affordability

Price of brands available at Westside is not too high as compared to its competitor’s

brands. This is due to their cost effective supply chain management. They directly pick up
the goods from the manufacturer thus ensuring low price tag at their store
Analyzing the strategies contributed critically to the success of Westside
and how far are the advantages sustainable in the long run

Quality of its product offerings

• Westside has been able to create a brand image and is consistently maintaining its
brand identity by new additions in products and catering to the market need.

• Private labels allowed them to provide value products for lower prices.

Store Layout

• Strategy to attract shoppers & keep them in stores which increases number of items
purchased

• All the three floors are carefully structured. Ist floor and IInd floor caters exclusively to
Women and Men respectively. Thus giving them privacy and more freedom to look into
their products

• Delightful in store experience- efficient and amicable staff

 With the retail clothing industry predominantly unorganized, analysis of
the competition in the retail clothing and lifestyle products industry

• As of 2003, India's retailing industry was essentially owner manned small shops. In 2010,
larger format convenience stores and supermarkets accounted for about 4 percent of the
industry, and these were present only in large urban centers

• Retail productivity in India is very low compared to international peer measures: labor
productivity in Indian retail was just 6% of the labor productivity in United States 

• Total retail employment in India, both organized and unorganized, account for about 6% of
Indian labor work force currently - most of which is unorganized

•  Training and development of labor and management for higher retail productivity is
expected to be a challenge

• Independent stores will close, leading to massive job losses

With the retail clothing industry predominantly unorganized, analysis of
the competition in the retail clothing and lifestyle products industry

Attributes Shopper Stop Lifestyle Globus Westside

Tagline• LocationShoppers Stop: The

Ultimate Shopping
Your Store. Your Style Fashion for a changing
world
Fashion and affordable
pricing
• No. of cities
Experience
Number Of stores 24 13 4 29
• Loyalty18,000sq
Store Size Programft - 60,000sq 1,00,000sq ft 1,00,000sq ft 10,000 to 20,000 sq ft
ft
Pitch • Store Ambience
Shopping experience Trendy, youthful and Latest trends Style and affordability
vibrant brand
Format Type Multibrands (brands Multibrands (brands and Multibrands (brands Exclusive Tata Trent
and private labels) private labels) and private labels) Group (only private
labels)
Loyalty Cards First Citizen card The Inner circle Globus pluscard Clubwest
Apparels share of 73% 65% 72% 79% (95% from private
Sales labels)
Store Layout Race track layout Race track layout Race track layout Race track layout
Cluttered Arrangement
Target Segment High Income Group High Income Group High Income Group Upper middle and high
income group
Strategies recommended for Westside to position itself effectively against
the evolving competition including leading Indian business houses and
international players

• Loyalty Cards: Clubwest classic and Clubwest gold for different target segments

• Store Layout: It should have more open space to walk

• Variety in apparel (Merchandise Mix) especially in Men’s category: various price points

• Differentiate the merchandise mix according to the planogram. For Example: Cosmetic
planogram should be different from apparel planogram

• Good customer service

• Location of Store

• Special discount for TATA employees (Currently 2.5%)

Analysis if Westside should get into the food retailing industry or remain
focused on its current line of business

YES!
Industry Analysis:

• According to a study on the food and grocery retail market by KSA Technopak, the
country's overall retail sales accounted for 44 per cent of its GDP

• Food retail sales make up for close to 63 per cent of total retail sales. In absolute terms,
food retail sales have grown from Rs 3,81,000 crore in 1996, to Rs 7,03,900 crore in
2001. 

• Modern, or organised retail, accounts for just about 1.6 per cent of the total retail sales
in the country, estimated at Rs 18,000 crore

• The sector had not seen too many big entrants

• As of 2003, while Chennai has some five organised food and grocery retail chains, other
big cities such as Delhi, Bangalore, and Mumbai average only two-three such chains
Analysisif if
Analysis Westside
Westside should
should getthe
get into into the
food food industry
retailing retailingorindustry or remain
remain focused on its
Analysis
current if
line Westside
ofits should
business get into the food retailing industry or remain focused on its
focused on current
current line of business line of business

YES!

• Most food retail players have been region-specific as far as geographical presence is
concerned: RPG Group's FoodWorld, Nilgiris, Margin Free, Giant, Varkey's and Subhiksha, all
of which are more or less spread in the Southern region; Sabka Bazaar has a presence only
in and around Delhi; names such as Haiko and Radhakrishna Foodland are Mumbai-centric;
while Adani is Ahmedabad-centric.

• Given that organised retail has been registering growth rates of approximately 40 per cent
over the last three years, it is expected to grow to about Rs 35,000 crore in 2005, and close
to Rs 70,000 crore in 2010.
Analysis if Westside should get into the food retailing industry or remain
focused on its current line of business

YES!
Internal Analysis:

• Huge financial Base: Rs 2 Billion from sales of Lakme

• Financial profits from the previous fiscal year: from 64.6 to 90.9 million

• First Movers Advantage

• Experience in retail business: Established supply chain along with trained personnel

• Brand dilution wouldn’t occur since they intend to enter the food retailing business under a
different name

• Right marketing tools and strategies : in-house team for marketing research, customer
centricity, efficient employees, technology savvy
Analysis if Westside should get into the food retailing industry or remain
focused on its current line of business

No!
Industry Analysis

• Real estate has been the big deterrent to growth of the retail sector with areas that may
require attention, consistency and radical change include area calculation, leasing costs
and practices, deposit levels, operating costs and outgoings, property purchase practices,
shopping mall building standards, and a legal framework

• Lack of investors due to lack of players which wasn’t portraying the business as a lucrative
one

• none or little Government support

• Lower margins
Analysis if Westside should get into the food retailing industry or remain
focused on its current line of business

No!

• Consumers are not dissatisfied with existing shops where they buy ( Kirana stores)

• For a pan India model, given the federal nature of the country, the weak infrastructure and
the major variances in eating habits in different parts of the country, one will have to
replicate the retail administration costs for at least each region and therefore the gestation
period of the project becomes huge.

• While margins in the food and grocery business are only about 15 per cent, supply chain
management costs are very steep
Analysis if Westside should get into the food retailing industry or remain
Internal Analysis:
focused on its current line of business

No!

Internal Analysis

• No prior experience in retail of food items

• No existing suppliers and distribution channel in the food retailing industry

• Would need to acquire new competencies

• Unaware of the market dynamics

• Will take time to achieve economics of scale