Sales of top India retailers surpass pre-Covid levels
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The growth last quarter was driven by the festive and wedding seasons, top executives of these chains said in recent earnings calls. Both ecommerce and store revenue increased as compared to earlier quarters, when online sales were primarily driving the business.
Reliance Industries joint chief financial officer V Srikanth told analysts that the retail business of the conglomerate achieved almost “100% normalisation as far as the operation in stores is concerned, and footfalls were pretty close at 95% of pre-Covid levels” last quarter. Reliance Retail witnessed demand across consumption baskets, he said.
The retailers expect a much shorter disruption due to the third wave of the pandemic after witnessing an improvement in consumer sentiment last quarter. All of them said they will accelerate expansion plans in the next few quarters.
Bata India chief executive Gunjan Shah said in its earnings release that the footwear retailer expects quick rebound in consumer sentiments owing to a decline in Covid cases and vaccination of 15-18 years olds.
Reliance Retail reported 90% growth in retail revenue excluding petro retail and connectivity businesses in the December quarter. The company said its consumer electronics, apparel and footwear business doubled on the back of strong festive sales last quarter, while grocery sales grew double digits. The retail business posted earnings of Rs 3,822 crore before interest, tax, depreciation and amortisation, a 23.8% increase from a year earlier and its highest so far.
Sales at Avenue Supermarts, which owns the D’Mart food and grocery chain, grew 22% in the December quarter, while Titan’s revenue surged 36% (excluding bullion sales) with the jewellery division doing exceedingly well and other businesses witnessing growth over pre-pandemic levels.
For Aditya Birla Fashion & Retail, which sells apparel brands such as Louis Philippe, Van Heusen, Allen Solly and runs the departmental store chain Pantaloons, sales expanded 55%. Bata too reported sales higher than pre-Covid levels.
“It has been a fantastic quarter … As usual the Diwali and the post-Diwali season turned out to be very, very good,” Titan managing director CK Venkataraman told analysts. “The enabling conditions were perfect. We have reached a very high level of vaccination status in the country and therefore the customer anxiety was very low. The pent-up feelings for shopping and enjoying were there.”
Covid infection rates were low during the October-December quarter and there were virtually no government restrictions, leading to a surge in store footfalls. There was lower discounting and fewer days on sales during the quarter, which led to expansion in gross margins.
Retailers said they will further step up expansion plans, after new stores drove sales in the December quarter.
On Shoppers Stop’s earnings call, chief executive Venugopal Nair said the retailer will expand stores into tier-2 markets where there is a huge opportunity to grow. The departmental store chain is opening 8-10 stores this fiscal year and planning for another 10 in fiscal 2023.
Reliance Retail’s head of strategy and business development, Gaurav Jain, told analysts that as the situation normalises (after the Omicron-led third wave), the focus would remain on accelerating the growth momentum and expansion. He said increasing the pace of new store roll out is a priority area. The retailer opened 17,00 stores during April-December.
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