With buyers returning and sales improving in the last six months, a buoyed retail industry has started charting growth plans.
The negative and flat same-store sales (SSS) growth numbers are turning positive and the industry sayssustainable double-digit SSS growth is not far. Major retailers such as Pantaloon Retail, Shoppers Stop, Spencer’s Retail, Aditya Birla Retail and Koutons are confident of the growth ahead.
Most companies are chalking out fund raising and aggressive expansion plans and there is increased focus on stocks on shelves, too.
Shoppers Stop and The Loot India are renovating non-performing stores to get better traction.
Shoppers Stop that reported a SSS growth of 2% in the third quarter of FY10 has seen SSS sales jumping to 12-14% year on year in January and February. The retailer intends to add 1.1 million square feet of retail space over two years and is looking at raising up to Rs 250 crore via the qualified institutional placement route.
Pantaloon Retail reported an 11% SSS growth in the lifestyle segment and a 7% growth in value segment during the quarter ended December 2009.
Pantaloon, which has started to report its SSS numbers on a quarterly basis, has posted a 25% growth in revenues during the quarter.
The retailer’s home division that was the worst hit whole of last year is turning positive on the SSS front. Pantaloon intends to reach double-digit SSS growth in its home division soon.
Analysts believe this change in retail growth has been possible due to improvement in consumer sentiment; higher footfalls owing to better stocks in stores and an increased ticket size of purchases.
“Frankly, yes, there is an improvement in the market and consumer sentiment. For us, stores in North are showing same-store sales growth over 20%, while those in the West are seeing single digit growth. In South, the same-store sales growth is in the range of 10-15%. There is no reason why we should not be able to sustain this growth,” said Vinay Nadkarni, chief executive officer, Globus Stores.
Globus Stores, part of the Rajan Raheja Group, is looking at opening more stores to increase presence in the mini metros and tier 2 markets. Nadkarni said that the company plans to sustain SSS growth of 12-15% year-on-year.
A senior spokesperson at Spencer’s Retail said that on a monthly basis, the SSS growth for the company stood at 15-20%. The retailer is seeing double-digit SSS numbers since November.
The Loot India expects to maintain SSS growth at 11% year on year.
However, B S Nagesh, vice-chairman, Shoppers Stop, said it was still time for the organised retail to be certain that old glorious days of growth are back. “The sentiments are turning positive, but we are not yet seeing the buoyancy of 2007-08. As we move ahead, we will see high growth, but I believe that April-June period is going to be highly detrimental in governing retail growth,” said
Nagesh.
According to Retailers Association of India, the current estimate of retail trade in the country is in excess of Rs200,000 crore.
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