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The KK Modi group plans aggressive Twenty Four Seven expansion from 50 to 10,000 stores in five years. Samir Modi, MD, Twenty Four Seven, shares his strategy to achieve the target
It’s been over a decade you started Twenty Four Seven. Why it took you long to expand the format?
There is a huge demand for round-the-clock shopping, be it in an emergency or a hop-in option or for impulse shopping, primarily because of the rise in double-income households, busy professionals and youth seeking instant gratification.
Up until now, round-the-clock shopping wasn’t permissible in India as the government regulations did not allow shops to be open 24x7. It was only in March this year that the Delhi government permitted shops to stay open 24X7.
Reaching 10,000 stores seems an audacious target. How achievable is it? How will franchising fuel expansion?
Of course! the target is achievable. Most of our stores will be franchised — a new format that we are getting into. So far, we only operated company-owned and managed outlets. Besides, we already have an agreement with India’s largest fuel retailing chain Indian Oil Corp. (IOC) to open smaller stores at its petrol filling stations. IOC has about 24,000 petrol filling stations across the country. Even if we manage to open convenience stores at a fourth (or fifth) of IOC outlets, that would make the target of 10,000 stores achievable. Our stores at fuel-filling stations are smaller—about 500 sq.ft.—unlike the ones at high streets, which are spread over 1,000-2,000 sq.ft.
What’s your franchise model?
We are getting into cost-and-revenue sharing franchising model for aggressive expansion of our convenience store chain.
How much revenue are you expecting to generate?
With 10,000 Twenty Four Seven stores across the country, we target to generate retail sales of about Rs 55,000 crore a year (average Rs 1.5 lakh sales per store per day).
How will rebranding benefit you?
We want to change the perception of these stores and make them comparable with the best in Europe. We are rebuilding our stores from the ground-up at an approximate cost of Rs 1 crore per store.
The revamp plan includes the new logo and a new tagline as also the look of the stores that includes digital screen, focused lighting and peppy music.