Spencer’s Retail, the RP-Sanjiv Goenka Group’s multi-format retailer, is launching a luxury version of Natures Basket stores in order to garner higher margins.

Natures Basket (NBL), a wholly-owned subsidiary of Spencer’s Retail, is a premium gourmet retailer.

“Traditionally, Natures Basket is in the space of gourmet retailing, but it is slightly ultra premium. Now, we are redefining that into a luxury grocery. It is going to be a very different experience altogether. ,” Spencer’s Retail chairman Shashwat Goenka said. This concept is new to India, he added.

The retailer is launching its first luxury Natures Basket store in Mumbai. Compared to an average Natures Basket store size of around 2,500 square feet, this new format store will be of around 12,500 sq. ft. space.

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It will launch two more new format stores—a 7,000 sq ft size store in Kolkata in December and a 9,500 sq ft store in Mumbai in January next year. The stores will be launched in prime localities.

“The new concept stores are much larger in size, and therefore you can give a lot more experience to the consumers. It redefines what gourmet grocery retail really is,” Goenka said.

According to him, as these new concept stores are larger in size, the company can garner “a lot more revenue” from a single store. “And it will add a lot to our profitability as well,” he pointed out.

The retailer expects these new stores would be achieving break-even from the second month of operations. Investment on a store would be between ₹3-5 crore.

“In Natures Basket, we have a very healthy margin. These new concept stores will add to the margins because in this large format stores, we will have scope for higher margins. But on the pricing front, these stores will be competitive,” Goenka said.

Currently, the retailer has 32 Natures Basket stores. With the opening of the three new concept stores, the total number of stores will be 35 by this fiscal-end. In the next financial year, the company is planning to launch three-to-five new luxury stores.

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During the second quarter of this fiscal, Spencer’s Retail witnessed an improvement of 65 basis points in the gross margins. Natures Basket, on a standalone basis, registered an 8 per cent growth and improvement in gross margin percentage by 241 bps on a quarter-on-quarter basis.

Spencer’s Retail reported widening of its net loss to ₹70.12 crore for the second quarter of this fiscal from ₹53.78 crore for the same period last fiscal. The company’s revenue from operations fell to ₹574.04 crore during the period from ₹649.27 crore in the year-ago period.

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