Mohit Khattar, MD, Godrej Nature?s Basket, in an interview with FE?s Kakoly Chatterjee, talks about the decent growth of the company even during the economic slowdown. He also shares his expansion plans and suggests changes in government policies that could give a boost to the retail sector. Excerpts:

Considering that retail was hit very badly during the current financial year, some of the retailers had to hold back their expansion plans and even close down some of their stores, how did Godrej Nature?s Basket fare?

Our growth trajectory was very satisfactory during the current financial year (2009-10), in which we grew by 80%, compared to the previous year (2008-09) when we grew by 47%. We hope to continue with the growth during the forthcoming financial year as well.

What is your store strength and what are your expansion plans?

Currently, we have eight stores in Mumbai and we are looking at opening around 20 stores in the next two years in the major metros across India, with an investment of around Rs 20 crore.

What is the basic business model that you follow?

We are on the luxury end of the retail and import, processed and semi processed food from overseas. We cater to customers who are not affected by price rise or food inflation. It is important for us that the shopping experience is special for the customer and they feel pampered. We have food consultants in all of our stores who can guide the consumer through different products and how they can be prepared. We sell unique products to a niche customer base.

How many stock keeping units (SKUs) do you have in your stores generally? What are the kinds of products that you stock in your stores?

Usually, we keep around 5,000 SKUs in our stores. We stock a huge variety of imported food, which include domestic and international wines, cold cuts of meat and cheese, organic an wellness food, large varieties of pastas, noodles and beverages, exotic rare ingredients, meals, sauces, preserves and packaged food from around the world.

When was Godrej Nature?s Basket launched and how have you progressed from there?

Godrej Nature?s Basket was launched in 2005 as part of Godrej Agrovet and in 2008, it was spun off as a separate business. Initially, it was an outlet which sold exotic fruits and vegetables. However, this model was not very viable so from mid-2007 to mid-2008 all the eight stores were converted to gourmet stores.

Are you satisfied with the way your retail chain is faring?

This retail chain has grown by 80% during the current financial year when most of the others recorded losses. The chain also has a margin of 25% when the industry average is 15%. The sale per sq ft is Rs 25,000 per anum, while in some stores, it is Rs 18,000 per sq ft per anum and in others, it is Rs 38,000 per sq ft per anum. For most retailers this figure hovers around Rs 8,000 per sq ft per anum.While the throughput is five times higher compared to other retail stores, we almost have a full conversion rate at 90%.

Are you looking at launching private labels?

Going for private labels is kind of self defeating in a way because customers come to our outlets looking for imported products and labels and they do not mind paying for them. Most retailers in the mass segment go in for private labels to provide products at a cheaper rate. Since we are on the high-end gourmet segment, providing merchandise at a cheaper rate is not our priority. At a later stage, we could go in for private labels for select product range like cookies and herbs.