The Emergence of Amma Naana Supermarket

Ammanaana

Amma Naana does what all the organized supermarket chains cannot even aspire to do in the near future.

-The Hindu

Amma Naana, an independent retailer, owned and operated a 1,000 sq. ft store in 1996 – in one of the most affluent localities of Chennai. Situated at the crossing of Chamiers Road and Boat Club Road, facing the Park Sheraton Hotel, today Amma Naana has grown to a 7,500 sq. ft modern store. At an annual revenue of Rs 11 crore, Amma Naana has emerged as the single largest independent supermarket retailer in Chennai.

Historical background

The proprietor Mr. V. R. Govindaswamy’s father-in-law owned a 1,000 sq. ft street-front location which was leased to a retailer called Fairlands. With Fairlands re-locating to a much larger adjacent property, Mr. Govindaswamy and his wife inherited the space and decided to start Amma Naana in honour of the latter’s parents.

Since its inception in 1971, the store has grown to become a very successful store. With building competition as years went by, the need arose for expansion and development and hence Mr. Govindaswamy decided to buy an independent 10,000 sq. ft property just behind their existing store. In 1996, they converted three floors of the new building to a modern, self-service supermarket.

Store layout

Forecourt: The entry to our store leads the customer to the forecourt, approximately 1,200 sq. ft in size. This is the original Amma Naana which now stocks all the ‘impulse category’ merchandise – chips, wafers of all kinds, savoury snacks, chocolates, tobacco products and magazines.

Back hall on the ground floor, consisting of food, groceries, household cleaning agents and consumables, covers an area of around 2,000 sq. ft. Certain vegetarian frozen foods, fruits and a very limited spread of vegetables also form part of this main hall.

First floor (2,500 sq. ft) is divided into two sections. Part of it has chilled and frozen meat, poultry and marine products. A very well-stocked selection of cheese and chilled and frozen food is clearly one of the best in the city. The other half of the first floor is devoted to cosmetics, skin care, hair care and high-end toiletries. Most of the counters are devoted to separate brands. There is a small basement (1,200 sq. ft) devoted to general merchandise such as kitchenware, stationery, toys, dusters and cleaners, As is well known to retailers, this section may not attract all the customers but whoever comes in leaves behind a large margin!

Merchandise

The merchandise offered by the store is in sync with its core consumer group that originates from the SEC A+ segment in the neighbourhood. Several imported brands available here include Starbucks Coffee, Ceylon Tea, Diana of London, Hershey’s, Country Kitchen, Thousand Islands and many more. One can also find that the entire range of dry groceries such as rice, daland dry fruits are all packaged and branded with the store brand.

A 500 sq. ft space in the basement is devoted exclusively to packing store brands and their merchandise is focused specifically on customer groups. For example, there are about 60 SKUs of Korean sauces to cater to the growing Korean households in the neighborhood. A good array of sausages, salamis and spreads imported from Europe as well as neighboring Sri Lanka, feature in the frozen food area.  The store stocks more than 6,500 SKUs compared to about 4,000 SKUs stocked by the supermarket chains. In an interview for Retail Plus, The Hindu, M. Senthil Raj, CEO of Amma Naana, said, “We stock 120 cheese varieties of different brands. Parmesan Cheese, used for salads, is one of the fast moving cheese varieties in this outlet. An assortment of cheese includes Cream Cheese, Cheddar Cheese, low fat cheese. The exotic cheese varieties here include Paprika, Feta Cheese and Baby Bell Cheese. Stuffed cheese is available with flavours including olive and pepper. Fresh Mascarpone, an Italian flavor, is used to make the Italian pastry, Tiramisu.”

Amma Naana sells all its branded products at MRP. A significant number of SKUs, particularly in the grocery category, are priced well above the supermarket chains’ pricing. Amma Naana’s core offering is product range, customised offerings and differentiated shopping experience.

The conveniently-placed large LCD screen that operates as an out-of-home medium and the installation of a German packing machine (in place of manual packing), clearly indicates that they are in line with changing technological advancements.

Next Generation

Mr. Govindaswamy’s son-in-law, Mr. Senthil Raj has already joined the family business. Mr. Raj is an engineering graduate in computer science and is quite happy contributing to Amma Naana’s prosperity. He is obsessed with making Amma Naana more technology-savvy as well as improving its supply chain efficiency.