Companies

Slowdown slackens Shoppers Stop growth

Our Bureau Chennai | Updated on March 12, 2018 Published on January 06, 2012

Shoppers Stop has 48 stores across the country.

Muted consumer sentiment leads to slowing sales





Shoppers Stop expects to post lower like-to-like (in stores operational for over a year) growth in the third and fourth quarter of 2011-12. Because of the slowdown, consumer sentiment seems muted and it reflects in slowing sales. The December sales were almost flat and “I expect like-to-like sales growth to come down to 6 per cent for the next 12-18 months,” says Mr Govind Shrikhande, Managing Director of the company.

He said with 12 per cent growth, there was no sign of any slowdown in the first half of the year. This was despite the fact that most apparel brands took a 15-16 per cent price increase. But, in the third quarter, even during the festival season, the industry witnessed a lower like-to-like growth — “in fact, in terms of volumes, we posted a drop.” This clearly reflects the slowing trend of the economy. However, owing to the price increase taken by many brands, the average bill size still hovers at Rs 2,200 despite a drop in footfalls, he said. On the company's private label in apparel, he said at present it accounts for 16 per cent of the overall merchandise. Though it is more profitable, there is no intention to increase the proportion drastically as “we want to give our customers a good brand choice.”

He also said Shoppers Stop intends to take a price increase in the range of 12-14 per cent on its private label apparel.

Talking about FDI in multi-brand retail, he said, “My personal opinion is the Government should allow FDI with stronger caveats.”

Taking a cue from China's experience, the Government must tell those players to source more from India for their global market. If we take Wal-Mart as example, he says, it procures merchandise worth over $350 billion from across the world. But, it sources only $1 billon worth of it from India.

“We must ask them to increase it to, let's say, $20 billion, if they want to do business in India.”

Mr Shrikhande was in town to formally launch the company's third store in Chennai at the Ramee Mall. Including this, Shoppers Stop has 48 stores across the country.

The new store is spread over 41,000 sq.ft, spanning three levels.

Unlike its other stores, keeping with its bridge-to-luxury positioning, this store houses a wide range of top-notch international brands such as French Connection, Shiseido and The Body Shop.

Talking about consumerism in metros and Tier-II cities, he said the consumption pattern in Tier-II cities is totally different. While in metros, particularly in the apparel segment, sales of men's and women's garments contribute equally to its revenues, in tier-II cities with fewer women employed in offices, the ratio would be 60:40, he said. “In all our tier II stores, the kids' area will be the main attraction.”

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Published on January 06, 2012
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