Shoppers Stop mulls 'value format' stores to attract buyers, to open in tier-2 cities

The first store in the mass-priced segment will mesure up to 8,000 suqare feet and is expected to come up as soon as within 3 months

India's oldest departmental chain Shoppers Stop, owned by the K Raheja Group is eyeing to open value format stores in order to attract middle-class customers. The clothing and lifestyle merchandise chain has for 30 years mostly catered to a 'richer' customer base but now wants to increase its target audience and thus, is looking to model its future chains on the lines of the more accessible stores of Max and Zudio chains.

The first store in the mass-priced segment will measure up to 8,000 square feet and is expected to come up as soon as within 3 months, The Economic Times reported.

The department chain's decision to expand is probably due to the broadening economy which translates to more spending potential in other towns and smaller cities.

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“The idea is to open stores on the lines of Zudio and Max and capture a larger market especially in smaller towns,” ET quoted an official as saying.

Devangshu Dutta, founder of retail consulting firm Third Eyesight told the paper, "Shoppers Stop's competitors have demonstrated mixed success in the mass segment, and servicing this segment needs merchandising agility to respond to varying customer preferences across markets, as well the financial ability to sustain and scale." Scale on its own cannot guarantee success and an expanded customer base, Dutta added.

The merchandise and clothing chain is initially targeting to open stores in tier-2 cities as they already have stores in metro cities. The value format stores will also be opened in metro cities after checking on the response in the tier-2 cities.

Experts have said that owing to implications of Covid-19, the value format segments have gained traction and customer bases in tier-2 cities have also expanded.