Cover Story SPIRITZ HORIZON

CSD got most things right, working on others

  • PublishedJanuary 22, 2018

Which is the biggest, most profitable retail player in India? D’Mart? Future Retail? Reliance Retail? The answer is a loud NO. Instead, it is the Canteen Stores Department or CSD, run by the Ministry of Defense, which caters to serving and retired personnel of the Indian armed forces with a mammoth network of 4500 stores spread across the country. Last year, this retail colossus recorded sales of Rs 17,000 crore of which alcoholic beverages alone accounted for Rs 3400 crore. Not surprisingly, given its massive (and growing) clout, every alcoholic beverage maker in the country, big and small, jostles hard for a space on its store shelves. The CSD stores, better known as defense canteens, typically work on a not-for-profit basis with operating margins as low as 1%, enough only to cover their operational costs. Just for perspective, the margins in private retail are anything between 8 and 18%. What make these canteens viable, however, are their low overhead costs. Started in the pre independence

CSD - Liquor

era, CSD boasts over 12 million customers from the army, navy and air force including ex-servicemen and their families. However, like any organization its size, CSD too is dogged by its share of problems, which affects thousands of vendors and suppliers. The good news is that Air Vice Marshal M Baladitya VSM, the serving Chairman, Board of Administration & General Manager of CSD, is not just aware of these deficiencies but is working zealously to address them and turn CSD into a slick, streamlined, fast-moving and responsive organization, hand-in-hand with its key stakeholder: the liquor industry. ‘Communication is at the top of my agenda for change and anyone from the industry can approach me with ideas to improve the system,’ says the dynamic CSD head. His immediate priorities are to ensure greater transparency and root out corruption. The officer’s efforts are showing, with every industry leader we spoke to for this edition’s cover story underlining ease-of business and transparency as the two major virtues of an increasingly responsive CSD. They, however, did have some suggestions that could make the shopping experience at the canteens even better and the procedures simpler and more efficient. Sachin Mehta of William Grant & Sons believes that greater use of the right technologies, including the creation of an ecommerce kind of retail environment, is the way to go. Sandeep Kumar of Bacardi feels that the CSD must have many more brands and also offer its customers the option of shopping online. Vivek Chandramohan, COO, Grover Zampa Vineyards bats for better visibility for wines, given their proven health benefits and the current low demand levels for this category at the stores. Rakshit Jagdale, Executive Director, Amrut Distilleries believes that the CSD decision to open self-serving counters is a move in the right direction. Industry veteran Satpal Chaudhry, COO Khoday India Ltd. finds CSD’s pricing policy ‘challenging’ and suggests that its rates must be at par with the civil market so that manufacturers to get a fair deal. Are you listening Air Vice Marshal M. Baladitya?

Written By
ruby singh

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