“When we started our journey in 2000, we took one of our existing chicken stores and transformed it into a new concept—a supermarket,” recalls Biyas Roy, Executive Director, Arambagh Foodmart Pvt Ltd, reflecting on the transformation that marked the birth of the now-thriving supermarket chain.
“At that time, the idea of a supermarket, where customers could find all their daily food and grocery needs under one roof was quite innovative in West Bengal. It wasn’t something many local businesses were doing, so it stood out as a unique concept for our customers.”
This bold move gave rise to Arambagh’s Foodmart, but its true foundation lies in a simple yet powerful insight. “My mother, who was instrumental in shaping our business, made a keen observation,” recalls Biyas. “She noticed that customers buying chicken often needed other essentials—spices, rice, dal, and other ingredients for a complete meal. That sparked an idea: Why not offer these items alongside our chicken?”
What began as a small experiment—adding food items to their 200-square-foot chicken stores—soon grew into a full-fledged retail concept. However, the limited space of the original stores posed a challenge. “A 200-square-foot store, ideal for selling chicken, wasn’t sufficient to accommodate the growing range of products our customers wanted,” explains Biyas.
“We experimented with various formats over the years,” Biyas reflects, “but we soon realized that the convenience store model was where we truly excelled. It allowed us to stay grounded in our roots while meeting the changing needs of our customers. This approach not only turned out to be the most profitable but also perfectly aligned with our core mission: to make everyday shopping simple, convenient, and reliable for the communities we serve.”
With the USPs of good quality, attractive promotions and location convenience, Arambagh stores were steadily added over the years. But the journey forward wasn’t without setbacks. In 2006-2007, the bird flu outbreak dealt a severe blow to the company’s revenues, which were heavily reliant on chicken and related products. “It was a challenging time,” admits Biyas. “But it also taught us the importance of diversification and resilience.”
Evolution of Store Chain
A key change in Arambagh’s Foodmart’s evolution till date has been the shift in store size. Back in 2016, the average store size was around 550 square feet, largely due to the initial focus on converting smaller Arambagh chicken stores. Since then, the retailer has expanded to slightly larger stores, with the average size now around 730 square feet.
Explaining the shift in Arambagh Foodmart’s store format, Biyas states: “Over time, we realized we needed more space to meet the demands of our customers. A store size of around 700 to 750 square feet became ideal. The key reason for this change was the need to accommodate more products.”
As Biyas further elaborates, the core concept behind Arambagh’s Foodmart is convenience, particularly in providing essential products: “We are a convenience store, and for us, convenience means availability. To truly serve our customers, we needed to stock at least 90% of their daily needs. A 500-square-foot store was too small to fit all these essential items.”
In addition to its evolving store size, Arambagh has expanded its high-quality staple offerings—rice, pulses, spices, biscuits, snacks, chocolates, soft drinks, and frozen foods—while continuously adding new product categories to meet customer demand. Biyas informs, “Over the years, we have introduced books and stationery, as well as household care items—things we didn’t carry initially. We also added bulk groceries, with drums and bags of loose groceries.”
Regarding the variety of products on offer, Biyas shares, “The SKU count in each store can range from 3,000 to 7,000, with an average of about 4,000, depending on the store’s size and location.”
On the geographical front too, Arambagh has seen significant growth. Roy points out, “Although we’ve stayed within West Bengal, our geographic reach has expanded considerably. In 2016, just five or six of our 46 stores were outside Kolkata, but today, 42 of our 87 stores are in cities outside Kolkata, meaning more than half of our stores are now in other regions.”
By making a bold move into tier-two cities, Arambagh’s Foodmart is pioneering this convenience store format. Biyas adds, “We were the first to introduce this model in these markets, and now we’re eyeing the lucrative opportunities in tier-three cities.” With this ambition, Arambagh continues to expand its reach and product offerings, setting the stage for future growth.
Location Strategy and Customer Base
Arambagh’s success is deeply rooted in its strategic store locations, a key differentiator that sets it apart. “Our stores are positioned in densely populated neighborhoods, yet at key junctions to capture both local and passing traffic. Approximately 90% of a household’s daily needs can be fulfilled within a 10-minute radius or through our complimentary home delivery service,” explains Biyas.
She elaborates further: “All our stores are standalone units, never situated inside malls or shopping plazas. They are strategically placed on main roads or prominent bylanes, complete with dedicated car parks for seamless accessibility. We aim for a 70:30 ratio of local catchment customers to floating customers, with a strong focus on areas that align with our core Bengali clientele. Additionally, we establish stores within large residential complexes housing over 500 apartments to cater to concentrated demand.”
Arambagh’s customer base is primarily composed of middle- and upper-middle-class households. “While our stores attract customers across all age groups, we observe lower foot traffic from younger, more affluent families who often gravitate toward gourmet or specialty stores offering a wider product variety. Instead, we’ve cultivated a loyal base of older customers who heavily rely on our home delivery service,” notes Biyas.
She emphasizes that many of Arambagh’s customers do not own personal vehicles. “This is where our free home delivery service becomes a game-changer. It enables customers to shop in bulk without the hassle of transportation, making their shopping experience more convenient,” she adds.
By combining strategically located stores with a focus on middle- to upper-middle-class customers, Arambagh’s Foodmart has built a loyal and dependable customer base. The brand’s commitment to accessibility, convenience, and tailored services ensures it remains a preferred choice for everyday essentials.
Store Layout and Merchandise Display
“At Arambagh, we follow a no-frills, functional store layout designed to maximize convenience and drive sales,” explains Biyas. “All our stock is displayed directly on the shelves, ensuring easy access for customers.” The store is divided into four broad sections: grocery and staples, food, non-food, and chilled items. “Non-food products are strategically placed near the glass front, making them visible from outside to attract passersby,” she adds.
The store features a single entrance and exit at one end, with the billing counter positioned right beside the entrance. “This layout is intentional,” says Biyas. “As customers queue up for billing, they pass through the chilled section, which is designed to prompt impulse purchases of quick-serve items—a category that drives high impulse sales.” To further capitalize on impulse buying, children’s products are placed at child-eye level near the cash counter. “New arrivals and promotional items are given floor stacking wherever space allows, ensuring they catch the customer’s attention,” she notes.
Arambagh also maintains strong partnerships with major brands. “We have tie-ups with most leading brand owners, ensuring shelf space is allocated based on their share of sales,” Biyas explains. “Within each category, SKUs are displayed strategically to optimize visibility and sales.”
This thoughtful layout and merchandising strategy not only enhance the shopping experience but also drive efficiency and profitability for Arambagh.
Strategic Blend of Quality, Customization, and Customer-Centricity
Arambagh’s Foodmart has carved a niche for itself by focusing on three core pillars of retailing: high-quality products, localized customization, and exceptional customer service. These elements, combined with a deep understanding of customer preferences, have driven the brand’s growth and loyalty.
- Private Labels: The Cornerstone of Success
Food and grocery are the backbone of Arambagh’s sales, collectively accounting for 62% of total revenue. “Food makes up 36% of our sales, while grocery contributes 26%,” explains Biyas. “Within these categories, our private label products play a significant role, representing 17-18% of the combined sales and growing at an impressive rate of 22% year on year.”
Staples have always been Arambagh’s biggest draw, with private label products emerging as a key differentiator. “Staples continue to be our strongest category, and our private label groceries are a major reason for customer loyalty,” says Biyas.
The range of private label offerings has expanded significantly over the years. In the grocery category, Arambagh has introduced healthier options like brown rice and doctor-recommended seeds, alongside locally sourced rice from various districts. Rice stands out as the highest-performing individual category, contributing 5% to overall sales.
Beyond groceries, the brand has ventured into eggs and tea. “Our eggs are sourced directly from the market, offering superior quality at lower prices than branded eggs. Similarly, our tea is sourced from Darjeeling tea gardens, ensuring premium quality,” Biyas explains.
2. Understanding Customer Preferences
Arambagh’s growth is rooted in its ability to adapt to customer needs. Bulk products, such as 25 kg rice packs, have seen rapid sales, reflecting the preferences of their customer base. Rice, in particular, contributes the most in terms of value, especially in bulk packs. Other fast-moving categories include biscuits, chocolates, snacks, soft drinks, and pulses.
The frozen and chilled food category has experienced the most rapid growth, driven by the trend toward quick snacks and improved packaging. “What was once a shopping-list category has now become an impulse category. With good visibility in freezers, this category has the potential to deliver the highest sales per square foot,” Biyas notes.
3. Localized Customization
Arambagh’s product mix is highly tailored to local preferences. “Our offerings are personalized to meet the specific needs of each locality,” says Biyas. For example: In areas with a large South Indian population, South Indian products are stocked; Near schools, the stores offer school supplies; In neighborhoods with universities or hostels, easy-to-cook meals and student essentials are prioritized.
This localization extends to in-store experiences as well. In North Bengal and Siliguri, for instance, communication is conducted in Nepali, and Nepali-speaking staff are employed. “This creates a sense of familiarity and belonging, making customers feel the store is ‘theirs,’” Biyas explains.
4. Exceptional Customer Service
Service is a key differentiator for Arambagh. The brand goes beyond standard offerings to provide personalized assistance. “We offer free home delivery, especially for elderly customers, and even help with tasks like arranging groceries in their kitchens,” says Biyas. This level of care has fostered deep loyalty among a significant segment of their customer base.
Arambagh employs approximately 750 staff in total across its 87 stores and two central warehouses. On average, each store is staffed by around seven employees, ensuring efficient operations and personalized customer service.
The employee-customer relationship is another critical factor. “Many of our employees have been with us since the beginning, and a large percentage of our customers have also remained loyal for years. They’ve become like family,” Biyas shares.
To further enhance customer satisfaction, Arambagh offers a unique incentive: customers who spend above a certain bill value receive a free item of their choice. “This has become more popular than any loyalty card system,” says Biyas. The inclusion of sugar—a staple in Bengali households—has been particularly effective in encouraging larger basket sizes.
5. Strategic Growth and Future Potential
Arambagh’s success lies in its ability to blend quality, localization, and service into a cohesive strategy. By focusing on private labels, understanding customer preferences, and customizing offerings to local needs, the brand has built a loyal customer base. The rapid growth of categories like frozen foods and the strong performance of private label products underscore the potential for continued expansion.
Strategies for Customer Retention and Loyalty
Referring to Arambagh’s strategies to retain customers and build loyalty, Biyas Roy outlines a clear, value-driven approach tailored to their target customer segment. “Customers everywhere are looking for value, but the definition of value varies across segments,” she explains. “For us, it’s about understanding who our target customers are, what they value most, and how we can deliver that effectively.”
“We don’t engage in deep discounting or price cutting,” says Biyas. “Instead, we focus on offering the best quality groceries through our private label range. This is a key differentiator for us and a major reason customers stay loyal.”
Promotions play a significant role in Arambagh’s strategy, but they are carefully designed to add value without compromising on pricing integrity. “We run the best promotions in the market, but these are very different from price cutting,” Biyas emphasizes. “Through our strong vendor relationships and volume leverage, we negotiate exclusive deals and pass the benefits directly to our customers. For example, promotions like ‘buy three, get two free’ are highly popular.”
The brand also organizes four major promotional campaigns each year, which have become highly anticipated events. “Our customers know these four months will offer the best promotions, and we see a significant increase in footfall during these periods,” she adds.
Convenience is another critical pillar of Arambagh’s value proposition. “We are the neighborhood supermarket, designed for quick and easy access,” says Biyas. “No matter where you are, you can reach an Arambagh store within 15 to 20 minutes. This proximity is a huge advantage for our customers.”
Arambagh ensures that customers can find almost everything they need under one roof. “At least 90% of daily essential items are available in our stores,” Biyas notes. “Despite operating in compact 700-square-foot spaces, we stock 4,000 to 5,000 SKUs by maintaining a lean inventory. This allows us to offer a wide range of products while ensuring availability at all times.”
Efficient inventory management is key to Arambagh’s success. “We control our inventory very stringently to avoid stockouts and ensure that customers can always find what they need,” Biyas explains. “This balance between offering a wide range of products and maintaining tight inventory control is crucial to delivering on our promise of convenience and availability.”
Arambagh’s strategies—centered on quality private labels, strategic promotions, convenience, and availability—are designed to meet the specific needs of their target customer segment. By focusing on what their customers truly value, the brand has built a loyal customer base and continues to strengthen its position as a trusted neighborhood supermarket. “It’s not just about price; it’s about delivering the right value in the right way,” Biyas concludes.
E-Commerce and Impact of Quick Commerce
Biyas points out that while many businesses are moving towards e-commerce and omnichannel strategies, Arambagh has not pursued this path yet due to several key reasons. She states: “I haven’t seen any local convenience store or food and grocery store successfully integrate it with their small-format brick-and-mortar stores.”
She elaborates on the difficulties in making this integration work, noting the lack of back offices or separate stock in each store to support e-commerce. “We do not have separate stock or back offices at each of our stores to cater to e-commerce demands. Our warehouse simply serves the stores, and managing deliveries or returns directly from the warehouse is not cost-effective.”
Another challenge Biyas highlights is the frequent changes in pricing and pack sizes of grocery products. In the food and grocery sector, MRP (Maximum Retail Price) and packaging sizes can change rapidly, sometimes even multiple times a day. “For one SKU, we may have three different MRPs at the same time. Keeping an up-to-date catalog online while managing real-time updates for prices and stock is difficult. This integration hasn’t been successfully achieved by any small-format, food and grocery stores so far.”
Despite the rise of e-commerce, Biyas is clear about Arambagh’s strategy: “We have found alternatives that work well for our customer base. One of the key things we’ve learned is that it’s a mistake to try and cater to everyone. The first lesson we learn in an MBA program is to segment your customers and focus on doing 200% for your chosen segment. Trying to do everything for everyone is a cost-heavy approach that leads to inefficiency and low profitability.”
This philosophy is what drives their decision to avoid e-commerce at this stage. Biyas emphasizes: “We know there are certain things we can’t do because it would involve additional costs and roadblocks. We’d rather focus on doing what we do best and doing it in the best possible way.”
When asked about the rise of quick commerce, particularly in Kolkata, Biyas shares that Arambagh’s business has not been significantly impacted. “The segment we cater to is very different from those attracted to quick commerce platforms. Our customers are comfortable either visiting our stores or placing orders via telephone or WhatsApp. We’ve never targeted millennials, and we still don’t.”
However, Biyas does acknowledge the challenge posed by the deep discounting tactics employed by quick commerce platforms. “The deep discounts in e-commerce have affected us. Customers often ask why they are not getting the same 50% or 30% discounts in our stores. While it hasn’t significantly hurt our business, it is something we need to navigate carefully.”
“On average, we see 12,000 customers visiting our stores daily. The average ticket size typically amounts to Rs. 360,” informs Biyas, highlighting the company’s success in consistently attracting and serving a large volume of customers, even amidst a competitive market landscape.
Supplier Base and Quality Controls
Arambagh’s Foodmart works with a supplier base of 150 to 200 vendors. Biyas explains, “Our criteria for onboarding new suppliers are strict. We only consider products that already have existing market demand. We don’t have the luxury of supporting experimental or very new launches.” To mitigate risks, the company sets clear terms and conditions around payments, inventory damage, and expiry.
When it comes to identifying new sales categories, Arambagh relies on a mix of processes. “We gather customer feedback, conduct competitor surveys, and consider suggestions from existing vendors about new product launches that have strong focus and advertising spend,” Biyas notes. The company also ensures that any new vendor products have a market pull factor, are already accepted by consumers, and have generated inquiries in-store. If necessary, vendors are asked to arrange for special in-store visibility and product sampling to further promote their offerings.
To maintain quality, Arambagh strictly monitors its food products. Stock aging, damage, and expiry are tracked through both system checks and manual oversight by a team of supervisors. “We have a set of guidelines for vendors, covering the delivery of fresh stock and the return of expired or damaged goods. If there is any deviation from these standards, stocks are not accepted at the warehouse,” Biyas adds.
Staples are purchased from wholesalers and rice mills, while spices are sourced from regions known for their superior quality. A dedicated purchase team ensures that all products meet the company’s high-quality standards.
Employee Retention and Support Systems
Arambagh’s Foodmart prioritizes employee recruitment, retention, and support through a personalized, inclusive, and family-oriented approach. Biyas explains the company’s strategies, which focus on stability, diversity, and holistic care for employees.
Recruitment and Stability
Arambagh recruits a mix of local and rural employees to ensure workforce stability. “Urban youth often switch jobs frequently, but individuals from rural backgrounds, especially those with families to support, tend to stay longer,” says Biyas.
Gender Diversity and Inclusion
While gender diversity remains a work in progress, Arambagh is actively fostering inclusion. “Women currently make up about 15% of our workforce, though they are not yet in leadership roles,” Biyas notes. “We’re training and mentoring them to advance to mid-level positions like store managers.” The company also employs specially-abled individuals, including those with intellectual and developmental disabilities (IDD), as well as transgender candidates. “These employees have been with us for 7 to 10 years and are now integral to our team,” she shares.
Retention through Support Systems
In a low-margin business, Arambagh compensates for modest salaries with robust support systems. “We create a family-like environment to make employees feel valued and cared for,” says Biyas. The company organizes annual events and picnics, fostering bonding and camaraderie. “Employees share their talents and stories, strengthening the sense of belonging,” she explains.
During personal hardships, Arambagh steps in to support employees and their families. “We stand by them during medical emergencies or difficult times, which has helped retain many long-term employees,” Biyas adds.
Accommodation and Daily Support
Arambagh’s commitment to employee well-being extends to practical support. “We provide accommodation for rural employees, as finding affordable housing in Kolkata can be challenging,” says Biyas. “We also arrange for a cook, with employees sharing ingredient costs. This ensures they don’t have to worry about meals after a long workday.”
By combining stability, inclusivity, and holistic care, Arambagh’s Foodmart has cultivated a loyal and dedicated workforce, reinforcing its reputation as a supportive and family-like workplace.
Financial Performance and Profitability
Arambagh has seen consistent growth over the years, with a few notable exceptions. “Sales growth has been in the double digits annually, except for the year following Covid,” says Biyas. However, net profit margins have remained modest, hovering in the range of 1-2%. “In the grocery business, profitability rarely exceeds 2%, and that’s where we’ve stayed,” she explains.
The primary challenge lies in pricing control. “Apart from our private label products, the prices of other products are set by brands. We operate on fixed margins, which don’t increase over time,” Biyas notes. This lack of pricing flexibility, combined with rising overhead costs post-Covid, has squeezed margins. “Everything has become more expensive—AMC costs, electricity, you name it. The only way we’ve managed to stay profitable is by monetizing every available space in our stores.”
To offset shrinking margins, Arambagh has adopted innovative strategies to generate additional revenue. “We charge brands for specific shelf placements, eye-level displays, banners, posters, and even communication within stores,” Biyas explains. Unlike larger supermarkets that focus on premium spaces like end caps and gondolas, Arambagh monetizes every inch of its stores. “We charge for the back of cash counters, pillars, walls behind deep freezers—anything that can be utilized. Brands can even create their own shelves on pillars and pay us for the space.”
This approach has helped the company balance its books. “Selling products alone doesn’t ensure profitability. We’ve had to sell every possible space to stay afloat. It’s a tough business, but we’ve found ways to adapt and thrive,” she adds.
Future Growth Plans and Strategy
Arambagh follows a strategic, gradual expansion model, focusing on consistent but controlled growth. “We don’t expand too fast,” Biyas explains. “Our financial model operates on a zero working capital model, where the entire inventory is sponsored by vendors and creditors. This means we don’t require significant working capital.”
The profits generated by the company support the opening of about six to seven stores annually, but expansion is not always consistent. “We alternate between periods of rapid expansion—12 to 30 stores in a year—and consolidation, where we focus on optimizing operations and improving systems. We consolidate every two to three years to streamline processes before pursuing further growth.”
The company has already established a presence in most tier-2 cities and is now focusing on tier-3 cities, where Arambagh’s target customers—who are less price-sensitive—reside. “We are now expanding to tier-3 cities, which support our customer base. These customers are not very price-sensitive, which fits our business model,” says Biyas.
Looking further ahead, Arambagh plans to expand into Assam, but logistical challenges remain. “A key challenge in expanding to Assam is the supply chain. We are working to align vendors in North Bengal to ensure a steady supply chain. This will take time as we need to ensure a fill rate of over 80% from local vendors to sustain operations,” he adds. Biyas projects that Arambagh’s expansion into Assam will likely happen in 2026-2027.
In North Bengal, where the company is seeing positive sales and profits, Arambagh is working hard to streamline its supply chain operations. “Currently, we are still sending stock from Kolkata to North Bengal twice a month, which is inefficient. We are engaging with brands and distributors in Kolkata to improve the local supply chain, ensuring that local distributors can deliver directly to our stores,” says Biyas. However, resolving this issue will take time, and Biyas estimates that it will take at least two more years before the supply chain in North Bengal becomes fully autonomous.
In terms of financial performance, Arambagh is targeting steady growth. For the financial year 2023-2024, the company’s turnover was approximately Rs. 140 crore. Biyas projects that for the 2024-2025 financial year, the turnover will reach Rs. 167 crore. The company aims to maintain growth of about 15-20% annually, depending on the number of new stores opened each year.
In terms of store count, Arambagh expects to reach the 100-store milestone by the 2025-2026 financial year. “We have a few stores already in the pipeline, so I’m hopeful we will touch the 100-store mark by next financial year,” concludes Biyas.
Arambagh’s expansion strategy is focused on sustainable growth, with careful attention to operational efficiency, supply chain management, and market demand. Though challenges remain, particularly in supply chain coordination, the company’s measured approach and strategic planning are positioning it for continued success in the coming years.
