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Sambhar Mafia - Cooked To Kill!

Saturday, May 07, 2005

Dairy Farm 1 – RPG Group 0

They built a great brand and then gave it away. I’m referring to the “Food World” brand, which was built by the RPG Group. Business Standard reports that RPG Group and their JV partner Dairy Farm Group of Hong Kong are parting ways. Dairy Farm group has a presence in Singapore, Malaysia, Hong Kong and they run a range of stores (Cold Storage, Guardian Pharmacy, Seven Eleven to name a few) in the region.


RPG Group has been the pioneer in organized retail in South India. They run stores like Spencers, Food World, Music World and Health & Glow.Food World was designed on the lines of Cold Storage. Health & Glow concept is based on Guardian pharmacy. The Food World chain is going to be split almost equally between RPG & Dairy Farm. Dairy Farm group will have the right to retain the Food World brand whereas RPG Group is going to run their stores under the name of “Spencers Supermarkets”. I guess this is a big loss for the RPG Group as the Food World brand was deeply entrenched in the minds of the customers. I guess RPG Group needs to work overtime to build the brand all over again.

9 Comments:

  • People tried to have similar sounding stores, like 'FOOT WORLD' to capitalize on that brand... Only Subhiksha came close to giving FW a run for its money, but, is currently failing miserably. Anyways, Subhiksha has also entered into groceries now... Did u know that?

    By Blogger Tat Tvam Asi (a.k.a) The Ultimate Reality, at 8:32 PM  

  • I don't think RPG got the worst of the deal. Loyal and even regular customers will find that their favourite store has a new brand name now. If RPG retains the same level of service/affordability, etc. I see no reason for them to switch just based on name change.

    The trick will be for Dairy Farm to capitalize on the FW brand by opening up outlets damn quick - before the brand fades from public memory. You don't want to come back with a previously famous brand only to find "Spencers" entrenched in the marketplace like FW once was.

    By Anonymous deepak, at 12:17 AM  

  • My classmate is now a senior executive in Food World. They are going thru some metamorphosis now that international chains are firming up their India plans. For a brief while (based on a news item), I thought the CEO was also quitting to joining Pantaloon but I heard later that it was not so.

    By Blogger thennavan, at 12:05 PM  

  • Oh dear...I guess people who swear by FoodWrold will be confronted by which to choose from! I guess the branding already exists and unless something tragic happens, people might stick to Foodworld!

    By Anonymous divya, at 2:03 PM  

  • Hi!! Yeah, I am organizing Anusmaran here. Its next weekend. Good to hear from you.

    By Anonymous Anonymous, at 6:34 PM  

  • @Venkat,
    Although Subhiksha created an uproar in the market, the could not sustain the momentum. They managed to get VC funding and lot of publicity.

    @Deepak,
    Only 50% of the stores will pass over to the RPG group. Dairy Farm Group anyway has an established brand and 50% of the outlets to start with. The tussle is gonna be interesting. The exact split of the locations is not yet known.

    @Thennavan,
    The Business press had reported that Raghu Pillai (a well known figure in the Indian retail scene) was quitting RPG Group and moving over to Pantaloon. The rumours might have started spreading probably due to the discussions between Dairy Farm Group and RPG.

    @Divya,
    The average consumer might still buy at the nearest FoodWorld outlet. They might be in for a surprise in the nearby outlet changes its name to Spencers. They might then probe into the reasons for the name change.

    By Blogger Kaps, at 11:40 PM  

  • Is Raghu pillai still in RPG - i thought he had left RPG for Pantaloon. With Food world gone, theri strength in Retail sector will be badly hit.

    Thuglak

    By Anonymous Anonymous, at 4:05 PM  

  • Guess Spencer is much closer to chennaivaasi's heart than any other store.If RPG retain the same brand, nothinh like it. Also, I see that Food world has great visibility. But their service and 'feel good' factor is actually not great.

    By Blogger Thayirsaadham, at 11:21 AM  

  • Did u say Subhiksha cud nt sustain its momentun.......

    well i recently read in major dailies that Subhiksha has moved to Delhi blr ahmdabad and already has 300+ stores.

    i visited a store in delhi, have seen lot of them here and i think its real value for money proposition....
    nowhere u get this kind of discounts...
    across all products...

    Dont think they have lost any steam....

    By Blogger super, at 5:42 PM  

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