The recent rise in food prices, orchestrated by a number of factors including the increase in the rate of Good and Services Tax (GST) has had an adverse effect on middle and low income families.
Prices of most vegetables and fruits registered a sharp rise, creating inroads into family budgets, forcing many to curtail their purchases. Besides, developments in most countries also impacted the volume of exports into this country, making fruits and vegetables scarce.
However, recent months have seen a downward trend in the price of groceries, fruits and vegetables, slightly improving the demand for household goods.
While these factors – recession, rising prices, a higher GST rate, contracting job market and falling levels of business confidence hit the average New Zealander hard over the past two years, some retailers have tried to lower the prices of essential items.
Food 4 Supermarket is one of them. The Otahuhu based retail shop (and its branch in New Lynn) was aware of the hardships and accordingly adjusted the prices of almost all essential items to suit middle and low-income groups. Living up to its name, the Company continues to offer quality products at low prices. It brings the combined strength of bulk purchases direct from the source, passing on the benefits of low prices.
New Zealanders, who have a penchant for shopping and the quest for seeking the best offer, frequent such supermarkets.
Food 4 Less is a source of endearment for thousands of shoppers every day.
The official opening of the Otahuhu store seven years ago was a shoppers’ landmark, catering to a cross-section of the society.
Call it adversity being a great teacher in life, ambition driving entrepreneurial spirit, or the desire to move forward and make it in the society, those with determination, dedication and drive have seldom failed.
For Food 4 Less managing director Uma Chand, the man behind it all, the only way to remain progressive is through honesty and hard work.
Ownership of a fresh vegetables and fruits farm in his native Fiji for a length of time provided him the much needed experience and expertise.
“Life was tough, the hours of work were long, but there is no alternative to progress. Besides, if you love what you do, there is no problem,” he told his two sons Nilesh and Romit Prakash.
Managing a hundred acre farm back home was tough, but for Mr Chand and his growing sons, it was exciting and enterprising.
Now the same spirit rules Nilesh and Romit (a medical student at the University of Auckland) in looking after the 30,000 Sq ft supermarket in Auckland.
“Competition is rife and hence it is even more a challenge,” Nilesh says.
But the decision to purchase an on-going, loss-making enterprise was not easy.
Nilesh knew the difficulties and problems associated with supermarkets – his earlier association with Foodworld in Otara was an eye-opener and a great teacher. He was first its employee, then manager and owner, but sold it a while later.
Pause to progress
A seven-month holiday in Fiji gave him time to reflect. Earlier experience in a kitchen company also taught him various aspects of management, logistics, inventory and accounting, armed with which he felt he was ready to enter the world of entrepreneurship yet again.
“Family support was crucial and my father and Romit said they would be at hand to promote any business activity,” he said.
When Food 4 Less, a running enterprise was placed on sale, it was a difficult decision to make. It was not a profit-making operation and the question was, would it work?
“The supermarket accounted for a weekly turnover of about $15,000, far below even a break-even point. We tried to assess what went wrong and tried to fix it. Even so, it was a risky decision to make,” Nilesh said.
A bold decision
The value of a supermarket with declining fortunes – Nilesh said $800,000 was paid – may have been difficult to determine but the challenge of making it stand on its legs again remained. The Chand family knew a lot of homework had to be done.
“The shelves were empty, the supermarket needed a wider variety of goods, better pricing and of course a better environment for shoppers.
“The produce, the butchery and everything else had to be changed or enhanced. Food 4 Less had to be reinvented in Otahuhu,” he said.
The refurbishment and replenishment programme began and with more than 10,000 items on its shelf, the enterprise was re-launched, but Nilesh was weary of an aggressive marketing campaign.
“Everything had to be in place before an official opening. We had to ensure regular delivery of fruits, vegetables, dairy products and other items so that customers do not have to go elsewhere for their needs,” he said.
But the most important issue was pricing.
“Why should anyone come to our supermarket for an item which costs the same or more compared to other retail outlets?” he asked to himself soon after its purchase.
He realised most Indian retailers offered quality goods at lower prices and decided to follow the trend. He was also aware of the changing price structure among the major players in the industry.
“Even a dollar would make a difference,” Nilesh said and claimed most items sold in Food 4 Less conformed to lower prices, but to the same quality and standards offered by other supermarkets, grocery stores and retailers of its type.
Fresh fruits and vegetables must move fast and it is common for perishable goods to be offered at cheaper rates ‘just to get them out.’
But Food 4 Less boasts of reduced prices all the time to retain customer loyalty.
“Our pricing policy is not confined to goods that have shorter shelf-life. We try to provide almost all items-be they cosmetics or detergents, spices or beverages, food items such as rice and wheat used daily – at prices that are attractive and lower than what competitors offer. We realise the need,” Nilesh said.
Offering more for less may be a tough job in today’s market but Food 4 Less hopes to create a niche for itself among a cross-section of customers it serves.
Six years on, Nilesh and his brother Romit believe that they must continue to do better, strive harder and deliver what the customers need at prices they can afford.
For them, nothing less would do.
The above article appeared in our May 1, 2011 issue commemorating the Sixth Anniversary of Food 4 Less Supermarket, Otahuhu, Auckland