Retail chains adopt prepaid cards to retain customers

Prepaid cards have become the latest retail tool to keep consumers hooked to brands. They offer convenience and safety, because customers don’t have to carry cash, and they often come with a variety of offers, including discounts.

Brands like Café Coffee Day, Pizza Hut, Provogue, Kaya, Fastrack, Gili and a host of others have launched prepaid cards. A prepaid card works like a debit card with a PIN number that can be redeemed at the brands’ outlets. The cards in India are based on the closed loop model — that is, they can be redeemed only at the brand’s stores. “When I have money loaded on the card, the tendency to come to the same place is higher,” says K Ramakrishnan, marketing president at Cafe Coffee Day. The brand’s card Cafe Moments, launched this month, offers a 5% bonus on cards with a value of Rs 100 to Rs 499, 7% on Rs 500 to Rs 999 and 10% on Rs 1,000 and above.

A prepaid card obviates the need to pay cash every time, and it also enables faster accumulation of bonus points or other offers. Prepaid cards in India are currently being used more as gift cards. Some brands have used it to launch a promotion or a service. What the prepaid gift card did for Kaya was to generate incremental walk-ins,” says Suvodeep Das, marketing head at Kaya Skin Clinic. In Kaya prepaid cards, currency can be reloaded in multiples of Rs 500 to up to Rs 2 lakh. Kaya sells about 250-300 gift cards a month.

Global Prepaid Exchange recently estimated that the size of the organized prepaid gift card and gift voucher market in India is Rs 2,000 crore and would grow to Rs 8,000 crore by 2015. “The acceptance of gift cards in proportion to vouchers has increased significantly,” says Pratap T P, chief marketing officer at QwikCilver Solutions, a provider of prepaid card solutions.

However, Devangshu Dutta, CEO of retail consultancy Third Eyesight, says growth in prepaid cards would be restricted by the fact that they can be used only at a particular brand’s outlets. “Also, a customer cannot claim the minimum residual value in the card. He will have to top it up to redeem it,” he says.

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Retail Chains and Business owners beating tough times with new strategies

Tough times best to expand – pizza chain

Domino’s Pizza Enterprises Ltd has added new products to its menu as tighter household budgets help boost the fast food industry.

The new menu includes new pizzas, desserts, dips and for the first time it will be adding a pasta dish to its menu – just as its rival, Pizza Hut, did last month.

“This is a whole menu launch is more than a year’s work,” Domino’s CEO Don Meij told AAP.   Read More

Tough Times Call for New Ideas

The savviest entrepreneurs right now aren’t hunkering down. They’re rethinking their business models and hunting for new strategies based on the assumption that consumer spending won’t be rebounding to prerecession levels and that the types of products and services people want will be much different from before.

For a business owner, this can mean finding new sales channels, trying new marketing tactics and promotions, forming strategic partnerships and introducing new products that appeal to frugal shoppers. Read More

Source: AAP, WSJ.com

China losing its appetite for Western-style fast food

SHANGHAI, China — Down an alley from a KFC, McDonald’s and Pizza Hut here, Li Hong sat inside a dingy little storefront that serves full-course dinners for a dollar.

Her tray was filled with cabbage, carrots, potatoes, a chicken leg and rice, plus soup. A Western fast-food meal would have cost three times that much, said the young woman, who works as a sales clerk. “Why should I go there?” she said.

In the U.S., fast-food chains often thrive in tough times. But not so in China, where Western quick-service food isn’t the cheapest stuff in town and, in target markets like Shanghai, there’s too much competition. Plus, a growing number of consumers see it as unhealthful.

“Western fast food is still not cheap enough,” said Yee Mei Chan, a group-account director at Millward Brown’s office in Beijing.

In a recent survey, the marketing research company found that 78 percent of Chinese consumers were feeling some effect from the global financial crisis. About half said they were likely to cut down on eating at Western fast-food restaurants.

Read more on this article

Fast-food chain Pizza Hut launches new brand

Fast-food chain Pizza Hut will rebrand several stores to launch its home-delivery pasta service this year, as the chain seeks to cash in on the fast food industry’s downturn-fuelled mini-boom.

Pizza Hut, which is owned by United States food giant Yum! Restaurants International, is launching its new “Pasta Hut” brand in order to promote the group’s new home-delivered Tuscani Pasta products and capture more of the $11.6 billion fast-food industry.

Under the company’s plan, several Sydney Pizza Hut stores will be rebranded as Pasta Hut in the coming weeks, with the concept rolled out across the country over the remainder of the year.

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Starbucks to open 150 more European locations

NEW YORK (Reuters) – Starbucks Corp (SBUX.O: Quote, Profile, Research) is boosting its European presence with plans to license 150 new locations in Britain, France and Germany over the next three years in a deal with UK group SSP, Starbucks said on Thursday.

The coffee shops are to be opened at airports and railway stations and come as the chain looks to offset a slumping U.S. market with overseas growth.

Earlier this month Starbucks opened its first coffee shop in Argentina through a Mexican partnership.

The European deal is Starbucks’ largest licensing agreement outside the United States, according to The Wall Street Journal, and could test Europeans’ appetite for yet more take-out coffee.

“This collaboration aligns with our strategy to accelerate growth in our international business,” Starbucks CEO Howard Schultz said in a statement.

“It provides us with a strong platform to further expand the Starbucks brand across Europe.”

SSP is a food-retail operator that already runs three airport Starbucks and also operates Burger King and Pizza Hut outlets.

In November Starbucks reported its first quarterly drop in U.S. customer traffic to established stores and the trend has continued.

Hakkasan’s Yau Aims to Brand Designer Dining, Explore Fast Food

Jan. 21 (Bloomberg) — For someone who has pocketed $60 million this month for a stake in just one of his U.K. restaurant businesses, Alan Yau is remarkably modest and self-effacing.

He is casually dressed for an interview in his Michelin- starred Yauatcha eatery and switches tables so as not to disturb guests. He orders a tea and talks quietly as he outlines five projects, any one of which might be something to shout about.

First, he’s going to start opening overseas branches of Hakkasan and Yauatcha — two of London’s most-fashionable restaurants — next month. Tasameem, the property arm of the Abu Dhabi Investment Authority, will provide $100 million in working capital after buying its undisclosed stake. Yau is also opening a new London eatery chain and a bakery business, plus an up-market restaurant, and plans to develop a worldwide fast-food operation.

“It is exciting in that I believe it could compete with the top players in the fast-food business, in terms of the burger products, such as McDonald’s” Corp., he says in the Jan. 15 interview. “It’s also exciting in terms of something I believe could become an iconic brand in its own right.”

He won’t say what kind of food he is talking about, other than using the phrase “healthy Asian” at one stage. Even then, he says his aim is to divorce the food from its origins. He points to pizza as a parallel, saying it’s no longer tied to Italy.

“If you look at mass-market players such as Pizza Hut, they are able to put a chicken tikka masala topping on it and are still able to get credibility with the customer because that product is no longer Italian,” he says. “That’s important in fast food. The product needs to move away from its ethnic origins.”

Noodle Chain

Yau, 45, previously founded the Wagamama Japanese noodle chain with a single outlet in 1992. He sold that business to investors in 1998. There are now more than 50 branches in the U.K. and others around the world, including in Boston and Sydney. Yau is starting a Chinese equivalent — called Cha Cha Moon — in London next month and won’t be drawn on whether this might be the basis of his fast-food plans. He also declines to discuss financial details or to say what stake he retains in Hakkasan.

Hong Kong-born Yau didn’t speak much English when he moved to the U.K. as a child. He later worked in a McDonald’s back in Hong Kong and hasn’t forgotten the lessons he learned there.

“Fast food, for me, has an operation blueprint and that blueprint has been defined by McDonald’s,” he says. “As you walk in, you have the customer counter. Above is the menu display and behind that is the kitchen. This blueprint, even if you change it to something else, works extremely well as a fast-food system.”

The first overseas Hakkasan is scheduled to open in Istanbul next month, followed by Abu Dhabi in August, Miami in October and Shanghai early next year. Branches of Yauatcha are planned for Kuala Lumpur and Dubai in October, and Yau says he is about to sign for a site for another London Yauatcha. He doesn’t plan a second Hakkasan.

Designer Dining

“I want to position Hakkasan as a parallel to the luxury fashion brand, and therefore the quality issue and also the exclusivity issue is important,” he says. “For example, there are 50 Prada shops/concessions in Hong Kong, whereas there’s only one or two Hermes or four of five LV’s. I’d like the number of operations to be very, very limited in order to safeguard the quality and also to safeguard the exclusivity.”

Yau has several other irons in the fire. He founded and owns Busaba Eathai, a Thai restaurant business that is separate from Hakkasan, and last month he opened a Japanese establishment, Sake No Hana, where the cheapest champagne is Krug, at 30 pounds ($58.66) a glass. The place received mixed reviews.

“In terms of the post-opening re-engineering that we have to do, we’re only about 50 percent there,” Yau says. “I think it will take us at least two more years slowly to fine tune the operation. There’s so much that needs to be done.”

Duck Ovens

He plans to open an Italian bakery called Princi on London’s Wardour Street in June, with Milan’s Rocco Princi, and he has bought the site of Cafe Grand Prix — opposite Nobu Berkeley Street in Mayfair — where he will open an up-market restaurant called Hakka Berkeley, serving northern Chinese food, especially Peking Duck. The venue will be part of Hakkasan Ltd.

“We’re putting in about six wood-fire ovens, each the size of a pizza oven, for the roasting of the duck,” Yau says.

It’s after 7 p.m. when the interview ends. Yau, who appears shy, for all his big plans, heads out to a meeting with investors. He’s one of the most influential and successful restaurateurs, and I’m not sure if anyone in Yauatcha even recognizes him.

Interview by Richard Vines

(Richard Vines is London food critic for Bloomberg News. The opinions expressed are his own.)

To contact the writer of this review: Richard Vines in London at rvines@bloomberg.net.

Carrefour plans to enter India with multiple-partners

NEW DELHI: French retail major Carrefour is considering the multiple-partner option for entering India. A senior industry source in discussion for a possible partnership with the retailer said the company may not go for a single partner for front-end retail in India as its American counterpart Wal-Mart has done. On the contrary, the French giant would test waters in India by appointing multiple licencees in various parts of India.

“They are not looking at a very long-term arrangement with any single partner in India as of now and want the flexibility of opening shops on their own as and when FDI is allowed in retail,” the source said. Carrefour India general manager Gerard Freiszmuth was not available for comment.

In case such a scenario unfolds, Carrefour won’t be the first foreign retailer to have multiple partners while opening shops in India. Quick Service Restaurant (QSR) chains McDonald’s and Yum! Restaurants (which owns brands like Pizza Hut and KFC), have been operating in India through multiple partners, in respective areas.

The source said that the model that Carrefour is looking at with its licencees is short renewable contracts of 2-3 years. This gives the retailer ample flexibility to take over the business as and when foreign retailers are allowed in the country. Carrefour has already set up two business entities in the country —Carrefour Wholesale Cash &Carry India and Carrefour India Master Franchise Company for the direct-to-consumer front-end retail.

“Unlike Wal-Mart, Carrefour is a very conservative company when it comes to expansion. It does not want to depend only on one partner at least for now. Anyway, they would prefer to own their shops, which is not possible under current regulations,” a Delhi-based consultant said.

In the recent past, there have been speculations of Carrefour being in talks with potential partners in diverse sectors, which includes real estate companies such as DLF and Parsvnath Developers, financial services companies such as HDFC and some other leading Indian business families such as the Anil Dhirubhai Ambani group (ADAG) and the Wadias. It is learnt that Carrefour wants a conservative approach and a slow rollout, which is not agreeable to most Indian partners.

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