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Archit Singh (91127)

Ayushman Roy (91128)


Dinesh Joshi(91131)
Gaurav Seth (91132)
Huned Ali (91136)
Priyansh Sharma (91148)
About Food World
• Food World store was modest beginning in R.A
Puram in Chennai( 9 May 1996)
• By November 1998, FoodWorld retail outlets
reached19, in 3 large cities
 - Chennai (6)
 - Bangalore (8)
 - Hyderabad (5)
• First year turnover 1996-97 was Rs.210 million
• Projected turnover for 1998-99 was R. 870 million
and by November 1998, a turnover of Rs. 520
million already been achieved

Q2. Comment on the Choice of
the Store Name
• Primary focus – Food
Items
• Large assortment of
Products – targeting
Mass market

• Spencer’s perceived to
be more expensive
• The name FoodWorld
had an immediate
association with the
Q3. Analyze the Category
Management Process at
FoodWorld by using Table 1
Exhibit 3
Category Management
Category management
looks at
answering a series of

questions.
Issues that need to be

addressed
include –

• What items should be


carried
• in what quantities
• at what prices
• in which stores
• where in the store,
• how much shelf space
should be allocated
• what level of advertising
• Category management leads to
– better customer focus and system profit
focus,
– resulting in efficient assortment, efficient
replenishment, efficient promos and
efficient new product introduction.
• The corollary to this being that category
management leads to improved
consumer satisfaction, category growth
and thus better sales and profits for all
involved.
assification into four categories

Category Description Typical Products


Convenience Can Fruit, Can Veg, Noodles,
Tinned milk, Cigarettes,
Frozen Foods, Hardware
Destination Cereals, Pulses Flours Edible
Oils, Dairy Products,
Vegetables
Occasional Paper Goods, Pet Food,
Batteries, Misc
Routine Spices, Biscuits, Jams, Baby
Foods, Liquor,Detergents,
Skin Care, Hair Care,
Shaving Needs, Baby Needs
• Merchandising based on the
frequency of purchase and the type
of products.
• Specialty category- medium to high
range width.
• Other categories high range width
• Destination category – Tactical usage
maximum -attracts customers-help
other categories to grow.
• “FoodWorld” brand products in
commodities.
• A minimum of 2 brands in any
Main Group Total No. Total no Total no % Weighte
of of Sub- of SKUs Revenu d
Categorie Categorie e Average
s s Margin
Staples 5 35 523 28.39 14.79
Processed 16 70 954 16.22 18.20
Foods
Beverages 4 26 319 13.39 16.78
Non-Food 6 28 449 8.69 17.94
Health & 9 53 1069 12.1 14.97
Beauty
Perishables 4 19 310 15.79 20.18
H/W & 3 33 1693 5.6 23.24
Home
Total 47 264 5317 100 126.09
Category Scorecard

Volume Drivers Superstars


Staples Processed Food
Revenu

Perishables
e

14 . 29

D isca rd s Value
Non-Food Drivers
Health and H/W & Home
beauty
Beverages

18 . 01 Avg . Margin
• the category scorecard reflects the performance,
against measurable parameters
• can be used to compare against results in other
stores or against other categories.
• based on the Revenues and profits each category
generates.

• Superstars: These drive high traffic as well as


profits. A buyer must explore this
assortment.
• Value drivers: These generate high margins, but
volumes are low.
• Volume drivers: These generate high volume,
but margins are low.
• Discards: These SKUs are either dropped or
‘fixed’ for volume or profit.
• High importance to Processed Foods and
Perishables. Have high weighted margin
• For the Hardware and Home App. although
% revenue generated was the least. But
have higher margin.
• Staples were the Volume Drivers having
highest share in revenue.
• The Discards were giving decent returns.

Q4. Analyze store wise
performance from Exhibit 5,6 and 7
and suggest corrective steps to Mr.
Mohapatra
Findings
• In most of the case there is huge
difference between Total area and
the Trading Area i.e. lots of area is
used for non trading purposes
• Store No.6 in Chennai is making loss.
• Store 2,3,4 in spite of being a same
type( Type B) as Store 6 is making
profit. This may be due to the
location of the store.

Exhibit 5: Chennai
Chennai                

    Total Trading Sales('000)Sales per TA Sales PBT PBT(per


Area Sq.ft Area Sq.ft per Sq.ft sq.ft)

Store 1 14065 7257 9156 0.6509776 1.2616783 1005 0.0714539


04 79 64
  2 3000 2404 4415 1.4716666 1.8365224 428 0.1426666
67 63 67
  3 4494 3094 4619 1.0278148 1.4928894 398 0.0885625
64 63 28
  4 4231 3177 5431 1.2836208 1.7094743 538 0.1271567
93 47 01
  5 5000 3305 4151 0.8302 1.2559757 137 0.0274
94
  6 3500 2700 1269 0.3625714 0.47 -60 -
29 0.0171428
57
Exhibit 6: Bangalore
Bangalore              
Total Area Trading Sales('000) Sales per TA Sales per PBT PBT(per
Sq.ft Area Sq.ft Sq.ft sq.ft)
Store 1 9500 6492 11487 1.209157895 1.769408503 1265 0.133157895

2 5720 3976 4072 0.711888112 1.024144869 127 0.022202797

3 2565 2472 4910 1.914230019 1.986245955 285 0.111111111

4 4362 3729 4242 0.972489684 1.137570394 61 0.013984411

5 3650 3421 2180 0.597260274 0.637240573 -44 -0.012054795

6 2862 2437 2910 1.016771488 1.194091096 95 0.033193571

7 3024 2494 4825 1.595568783 1.934643144 65 0.021494709

8 3000 2656 2569 0.856333333 0.967243976 -4 -0.001333333


Findings
• Store No.5 and 8 in Bangalore is
making losses
• The loss making store are C type
• Operating expenses in Bangalore is
higher than both chennai and
hyderabad



Exhibit 5: Hyderabad
Hyderabad              

    Total Area Trading Sales('000) Sales per TA Sales per PBT PBT(per
Sq.ft Area Sq.ft Sq.ft sq.ft)

Store 1 4500 2971 3117 0.692666667 1.049141703 150 0.033333333

2 4000 3278 4690 1.1725 1.430750458 301 0.07525

3 3000 2168 2520 0.84 1.162361624 137 0.045666667

4 4084 3500 3445 0.843535749 0.984285714 120 0.029382958

5 3500 3000 179 0.051142857 0.059666667 -190 -0.054285714


Findings
• Store 5 is making loss
• Operating cost in Hyderabad is
lowest
• Dominated by only B and C type
Stores
• Absence of large retail outlets i.e.
Type A

Corrective measures
• To implement the proper utilization of
space. Lots of space is being used for
non-trading purposes
• Since PBT for Hyderabad stores are
pretty high as operating exp. is low.
So, expansion is an option. Type A
stores can be opened in Hyderabad.
• Proper entry and exit has to be created
so that the customer has to move
through the entire store which may
result in more purchases