Inflation is driving consumers, hard-pressed to save whatever they can from their income, to value retail chains that have sent footfalls as well as their business soaring.

Groaning under food inflation (last declared at 9.9 per cent), the higher cost of buying almost anything and the rising EMIs on everything that borrowed money can buy, including cars and homes, consumers find their effective disposable income shrinking. They have hit the value chains with a vengeance.

With hypermarts in particular giving some protection against inflation, more and more customers are flocking to their stores. The chains are trying to cash in on this, and putting out huge advertisements. On this Independence Day weekend large ads have been put out by chains, including Big Bazaar, Star Bazaar, Reliance Super and D-Mart.

The results have been visible. Aditya Birla Retail’s ‘more’ supermarket and hypermarket formats have seen a 15 per cent rise in same-store sales growth.

The story is more or less the same at every value retailer. Thomas Varghese, chairman at the Confederation of Indian Industry’s National Council of Retail, says value retailers in general are seeing 15-20 per cent same-store sales growth.

“The cheaper and value-for-money positioning is helping our formats see average ticket value go up and the number of bills too go up,” says Varghese.

Amitabh Mall, principal at Boston Consulting group, says “Hypermarkets have been able to increase affordability for consumers. For a low-income family, organised retail has the ability to lower the cost of the monthly consumption basket by as much as 5 to 10 per cent.”

Dinesh Malpani, who until recently ran the Bangalore-headquartered Total chain of hypermarts, agrees: “More customers are heading to the hypermart format. Footfalls are increasing.”

“There is definitely an upswing in hypermarkets due to inflation as consumers appreciate the better value at our stores,” says the CEO of a Mumbai-based supermarket retailer who did not wish to be identified due to company policy.

According to Ashutosh Chakradeo, head of buying, merchandising and supply of Hyper City Retail India, high inflation has resulted in a significant increase in footfalls. As a result same-store sales growth has been 15 per cent and even 20 per cent in some of them.

Hypermarts, which stock a large range of products, have also benefited from the growing trend among consumers to cut out-of-home consumption. For example, instead of going out to eat exotic food, they are buying ingredients and making the same food at home. This is evident in the increased buying of pastes, chutneys, sauces and condiments and other ingredients for such food.

“If people earlier went to a salon to get their hair dyed, today they think twice and examine if they can instead buy a L’Oreal pack and do it themselves at home for a third of the cost,” says Malpani. Since these specialty products tend to have higher margins than traditional food and grocery, higher sales of these items also help improve a retailer’s profitability.

“There is a little more discretionary money available with consumers for supermarket kind of goods as they have been forced to defer purchase of big-ticket items such as cars, mobiles and homes. We are using this opportunity to catch our customers’ imagination by offering new choices,” offers Damodar Mall, director of food strategy of the Future group.

Mall illustrates his claim with an example — mouthwash now constitutes 14 per cent of their oral category sales, which shows consumers are ready to upgrade beyond gels and toothpaste creams. Dove and Pears are among the largest selling personal wash brands in Big Bazaar,” according to Mall.

A recent survey by the Indian Council for Research on International Economic Relations shows that typical savings derived by a household from organised retailers rise as its income drops. Households earning less than Rs 10,000 a month are shown as the biggest beneficiaries of organised retail, which helps them save between 8 and 10 per cent on their purchase bills.