Most of the large-format retailers in India are witnessing an uptick in growth in same-store sales and the average transaction size thanks to strong demand in the market. Retailers like Shoppers Stop, Future Group and Aditya Birla Retail (ABRL) have reported an increase of 3-10% in the transaction size during the June quarter till date compared to the year-ago period. The bullish scenario has also given a boost to their expansion plans.
Same-store sales is a term which refers to the differential in revenue generated by a retail chain’s existing outlets over a certain period of time compared to the same period of the previous year. By comparing sales data from existing outlets (that is, by excluding new outlets), the comparison is like-to-like, and avoids comparing data that are fundamentally incomparable. This financial and operational metric is expressed as a percentage. Same-store sales are also known as comparable store sales, identical store sales or like-store sales.
In FY10, Shoppers Stop’s average transaction size was Rs 2,030 which has now increased about 10%. Said chief executive officer Govind Shrikhande, ?We have seen around 20% rise in the same-store sales growth. This can also be attributed to the increasing cash memo size per customer.?
The company has 30 stores at present, and is planning to roll out four more in July. ?We are going to add 12 stores, of which four will be opened in July itself in Bhopal, Bangalore and Aurangabad. The investment will be around Rs 100-120 for setting up these outlets,? said Shrikhande.
For ABRL, which operates the More hypermarkets, the increase has not been much, but it still forecasts a positive consumer sentiment. Thomas Verghese, chief executive officer, said: ?We have seen an increase of 3% in average ticket size last quarter. If you look at prices of the staples, be it sugar or pulses, they have eased a bit. The consumer spending remains stabilised more or less.? With good monsoons predicted for this year, the inflation is likely to come down further.
Pinakiranjan Mishra, partner and national leader, retail and consumer practice, Ernst & Young, reckons that the overall consumer sentiment in the market is bullish. ?Moreover, people have already got their salary hikes for this year and it is also holiday season that we are talking about. I predict the SSS growth to be upward of 10%. The negativity has gone now.?
On the other hand, the value retail format, the fastest growing business of the country’s largest retailer, Pantaloon Retail, is on an expansion spree. Damodar Mall, director-food strategy, Future Group, said: ?We are adding a Big Bazaar every week. This means 50 new stores this year. The income levels in urban India have been increasing.?