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We visited Raipur (in Chhattisgarh) and interacted with several regional sales managers, area managers and distributors of retail/QSR/FMCG companies to gain first-hand insight on their business (at store level) and evolving competitive landscape. Companies covered include: Avenue Supermarts (DMart), FMCG distributor (Jyothy Labs, Bajaj Consumer etc.), Go Fashion (Go Colors), Kalyan Jewellers, Metro Brands, Sapphire Foods (KFC and Pizza Hut), Sheela Foam and Vedant Fashions (Manyavar). However, since these discussions were restricted to store/regional levels, they should not be extrapolated as a national trend. Key highlights - 1) Avenue Supermarts (DMart): Apparel segment continues to face pressure due to increased competition, 2) FMCG distributor: Tata Consumer is increasing sales staff at distributor with separate salesperson for both foods and beverages segments to release salesperson bandwidth; Britannia is half the size of Parle in Chhattisgarh market, 3) Go Fashion: Basket size of customers is increasing with the introduction of new categories (~50% contribution to sales), 4) Kalyan Jewellers: Offers strong value proposition, inventory turn at ~2.2x in Raipur, 5) Metro Shoes: Store manager is responsible for sales target and profitability, very low attrition rate for store employees, 5) KFC: Average daily sales (ADS) of KFC in Raipur is very similar to that of Maharashtra, 6) Pizza Hut: ‘Flavour Fun’ launched recently is now ~40% of overall orders and is leading to reduction in ticket size, 7) Sheela Foam: It is the dominant market leader in Chhattisgarh, 8) Vedant Fashions: Manyavar is increasingly focusing on selling products to family members of bride and groom and the product range is also being built accordingly.

* Avenue Supermarts (DMart): General merchandise and apparel segments are growing decently but below expectations even though footfalls have recovered to pre-covid levels now. Apparel segment has witnessed a slowdown with increased
competition from Zudio and Reliance.

* FMCG distributor (Jyothy Labs, ex-Tata Consumer, Wipro Consumer, RSPL): The distributor has recently discontinued distributorship of Tata Consumer as the company had asked him to increase the number of sales person in distributor’s
payroll from 3 to 8 (RoI was below expectations as per distributor) with proposition of separate sales person for foods and beverages segments. Tata consumer had recently embarked on the journey to split salesperson (for foods and beverages
segment) for distributors in 1mn+ population cities (already implemented with several distributors of TCPL) with the objective of releasing salesperson bandwidth to focus on selling more lines within each segment. Ghadi Detergent (RSPL) has lost significant market share to multiple local brands. Within soaps, Santoor (expected to become No.1 in Chhattisgarh soon) and Godrej No. 1 are growing well in Chhattisgarh. Overall, policies are more stable for Jyothy Labs and Wipro Consumer as per the distributor. Jyothy Labs has moved its systems from offline to online in the last few years; its policies and claim settlement process are very efficient. The company has been very aggressive in investment like a) 60 sales
people in JYL’s payroll, b) increasing outlet reach by adding pharmacy channel, c) sales in outskirts through bikes.

* FMCG distributor (Bajaj Consumer, Parle Biscuits): Overall demand has slowed down post Diwali. Chhattisgarh is a glucose biscuits market with Parle being the market leader. Britannia is half the size of Parle in Chhattisgarh, as per the distributor. Parle G is the carrier pack for Parle into outlets (neither the company, distributor, wholesaler make money on Parle G). Launch of Milk Bikis has not impacted the sales of Parle; however, Patanjali Doodh biscuits has had some impact. Undercutting was high in ADHO (Bajaj Consumer) when inflation was high but the prices are same across India. ADHO contributes 95% of overall sales.

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