Spencer’s Retail, the supermarket chain run by RP Goenka, has charted an ambitious turnover target of Rs 5,000 crore by 2017-18. With this, the retail chain aims to nearly quadruple its turnover from the current Rs 1347 crore that it clocked in the last financial year.
Mohit Kampani, CEO of Spencer’s Retail said, “Going ahead, the company is looking at adding Rs 1000 crore in turnover every financial year and that will mean we will be Rs 5,000 crore four years from now.”
The company is also looking at adding 80-100 hypermarkets over the next four years as part of its strategy in achieving its ambitious turnover target.
Currently, the company has 31 hypermarts. Kampani said building every store can take anywhere Rs 4-6 crore and the company would be investing Rs 400-500 crore in store additions.
Spencer’s recently hired the services of Boston Consulting Group in a bid to grow the business at a faster pace.
“The consultancy firm is helping us in building a lot more robust processes and in adding capabilities that we don’t have as a retailer. It is also helping us with other things such as space management, analytics, etc to become more competitive,” explained Kampani.
The company is looking at a store size of up to 29,000 square feet and apart from food, which is the main focus area for the retailer, more space will now also be dedicated to non-food items. Currently, Spencer’s gets about 80% of its revenue from food items.
Spencer’s has been chasing profitability for several quarters now but has not managed to break-even as yet.
However, Kampani said that 29 out of 31 hypermarkets are profitable and the company is very close to a break-even.
“We are hoping that by the end of June quarter we should be profitable.”
In the last financial year, the company made a loss of Rs 209 crore. Once the company achieves profitability, it has plans to go for an IPO.