Spencer’s Retail, the retail chain of the diversified RP-Sanjiv Goenka Group, plans to continue investing in its omnichannel business with the model gaining traction faster than other formats. The company also expects its investments in the non-food portfolio to enhance its profitability.
The company’s omnichannel sales grew 10 times from the pre-pandemic level of 1.6% to 16.5% in the last financial year. It was one of the only retailers at nearly breakeven levels in the online and delivering sustainable business growth both on a quarter-on-quarter (q-o-q) and year-on-year (y-o-y) basis, Spencer’s said in its annual report for FY22. Its omnichannel business saw 1.8 times growth y-o-y, reaching around 16.5% of the overall standalone sales mix with a gross merchandise value (GMV) of Rs 329 crore in 2021-22.
“When compared to the same period of the previous year (FY21), our e-commerce business grew by 1.8x GMV in 2021-22…we are witnessing increased demand for our digital retail formats, and we intend to continue investing in our omnichannel business in the future,” chairman Sanjiv Goenka said.
Goenka said logistics would play a transformative role in the retail environment, and the company has invested in upgrading warehouse facilities to improve inventory movement efficiency. Thereby, Spencer’s Retail is expanding its digital reach across the country while achieving an optimal product mix. Notably, on a standalone basis, the non-food mix grew from 14.4% in 2020-21 to 16.3% in 2021-22.
“We continue to prioritise the expansion of high-margin categories i.e; non-food sales mix through better assortments and the introduction of sales or return (SOR) brands in the general merchandise and apparel,” the chairman said. Compared to FY21, the company’s share of the non-food mix percentage grew by 185 basis points (bps) and was gaining momentum in FY22.
Going ahead, Spencer’s expects significant growth in its omnichannel model and its investments in its non-food portfolio to enhance its profitability. “We would continue enhancing consumer experience and increasing customer connection through our in-store and digital formats. We shall also be working towards various consumer events locally through ‘Local Consumer Connect’ to provide the best-in-class shopping experience with varied assortments,” said Devendra Chawla, CEO & MD.
Chawla said the company was expanding its reach and enhancing its portfolio mix to deliver sustainable value to all its stakeholders. “However, uncertainty about the further potential Covid-19 outbreaks remains,” he added.
The company’s Ebitda grew from Rs 61 crore in 2020-21 to Rs 101 crore in 2021-22. Gross margins improved by 30 bps and stood at 20.7% in FY22. Its reported loss stood at Rs 122 crore for FY22 compared with Rs 164 crore for FY21.