By Kritika Arora
In the current time of inflation which has put a dent in the consumers’ pockets, Shoppers Stop MD and CEO Venu Nair believes that this is what has impacted premiumisation for them and is driving growth for the company.“Premiumisation is an impact we are seeing because when there is pressure on the purse, customers choose to go to brands they trust, they choose to upgrade themselves in what they buy. That is what is driving growth for us,” Nair told FE.
Nair further said that while there has been pressure on raw materials, Shoppers Stop took a price increase a few months back consequently, but noted that the basket size of the customers has also gone up. Basket size improvement is not only because of a price increase but also because people are buying more items into the basket, he said.
Shoppers Stop on Wednesday posted a 60% on-year rise in revenue from operations to `1,008 crore on upbeat consumer sentiment and a profit of `18 crore for the quarter that ended September.
Wardrobe and office reboot has driven demand, restriction-free festival period and gifting items like beauty, watches and home products have been driving demand for Shoppers Stop, Nair said. Occasions in terms of weddings are also what is driving consumer sentiment, he added.
Nair believes that the current momentum in consumer sentiment will sustain beyond Diwali and the company has invested strongly for the winter season and has planned events for customers to push sales. “Apart from customer sentiment itself, we would be creating enough reasons for customers to walk into our stores and shop with us online,” he said.
Overall on growth plans, the company is betting on the beauty category. The segment reported 45% year-on-year (y-o-y) growth during the September quarter and to leverage the growing beauty market in India, Shoppers Stop has obtained exclusive rights for retailing and distribution of international beauty brands for India — L’Oréal and Clarins.
Nair said that the company would be signing more such partnerships going ahead. Shoppers Stop has plans to open 15 beauty stores during FY23 which will be predominantly focused in metros and tier -1 cities.
“While we are 15-16% of our total business in beauty, in revenues we expect to do over `800 crore this year from `750 crore pre-Covid. The opportunity is massive in beauty And hence the investment we are making in the SS Beauty app, to give an omnichannel experience to customers,” said Nair
Private labels are another area that Shoppers Stop considers its strategic growth pillar. During the September quarter, private labels contributed 15% to the overall sales in apparel contributing 21%.
Nair said there is good demand for private labels and expects the apparel sales contribution in private labels to go up to 25-30% in the next 2-3 years.
The company is also making investments in private labels in terms of new stores, refurbishing existing ones, and digital strategy.
Investment in private labels is more on an operating expense front than the capital expense and that is something that will continue, Nair said.
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