Superstore sales top 20b last year

Monira Munni Superstores are booming in urban areas as major players go for expansion by banking on well-heeled consumers and middle-class people, industry people said. Retail shops have been faring well for the last two years, with the annual sales growth touching to as much as 30 per cent, they added. The sector is dominated by about 15 companies that operate 100 outlets. Of them, Agora now operates 10, Meenabazar 11, Shwapna 42, Nandan five and Prince Bazar two outlets. The annual turnover of the superstores stood at around Tk 20 billion (2000 crore) in 2010 which was Tk 15.0 billion in 2009, according to data from Bangladesh Supermarket Owners' Association (BSOA). "Supermarket culture is growing fast creating awareness among the consumers about the features of products," President of BSOA Niaz Rahim told the FE. This culture has established customer service in retailing and also a relation of faith among the suppliers, customers and the owners of superstores, he said. Suppliers are now well organised with their identity such as trade licence, VAT registration and a mailing address, he said, adding farmers get instructions on how to grow and how to preserve the products to ensure quality. Though the industry has passed 10 years, the main challenge is supply chain which is still far from satisfactory, Mr Rahim, who is also the group director of Rahimafrooz that operates Agora, said. "When we started, we did not grow accordingly for lack of supply chain; products didn't arrive as there was inconsistency and damage of products," he said. "Money can establish a shop but it is difficult to supply the products to the shelves especially the perishable items," he said. And no such organised supply chain is yet to be developed in Bangladesh, but the retailers are trying to develop their own, he added. ACI Logistic that started Shawpno in a large scale across the country stumbled and brought down the number of its outlets to 42 from 65, mainly due to failure in maintaining supply chain, persons familiar with the situation said. The company is now focusing on its supply chain management, they said. Shaheen Khan, head of operations of Meenabazar, said superstores are doing well in terms of expansion as major players have started adding more and more outlets over the last two years. "But the sector is still in its formative stage as the massive expansion has taken place in last two years," Mr Khan said, adding Meenabazar has opened two new outlets and will launch three more in December in Dhaka. The company has contract farming arrangement with farmers outside Dhaka in a bid to strengthen the supply chain especially vegetables and organic products, he said, adding it also imparts training to the farmers on cultivating organic products. By year end, there will be 15 outlets of Meenabazar, he said, adding they have planned to open more than five outlets next year. The future of the sector is promising, he said, explaining life style of urban people is changing fast with full of activity. Echoing Mr Khan, the BSOA president said the commodity prices also will stabilise within next three to five years when the supermarket culture is fully established. There will also be a big jump in internal government revenue collection, huge investment in food processing sector and most kitchen markets will come under a systematic way ensuring fair price to farmers, Mr Rahim explained. Due to massive expansion of superstores, farmers will no more be needed to turn to the multi-stage intermediation as they will be able to establish direct linkage with the chain stores operators. "As a result, they (farmers) will no more be cheated," Zakir Hossain, general secretary of BSOA, said. Mr Hossain lamented that they did not get the required assistance from the government, although they were paying taxes. There should be a single regulatory body to monitor the growing industry. The association will celebrate its 10th anniversary on December 17 when it will also organise a fair in the capital. For this reason, BSOA has arranged a campaign of two months to create awareness among the consumers.