Listed retail players such as Shoppers Stop, Aditya Birla Fashion and Retail and Trent have posted an increase in Q1 topline ranging from 14-25% as they liquidated stocks before the new tax regime.
The implementation of GST has had some interesting consequences. Listed retail players such as Shoppers Stop, Aditya Birla Fashion and Retail, Trent and other retailers have posted an increase in Q1 topline of 14-25% as they liquidated stocks before the new tax regime which came into effect on 1 July. Revenues of Shoppers Stop, promoted by the K Raheja Corp Group, increased by more than 14.5% on a year-on-year basis to Rs 941.1 crore. According to the managing director, Govind Shrikhande, the like-to-like sales (sales of stores that have been in operation for at least five years) grew 19.8%. This is nearly double the regular growth that the company sees during this time every year.
“The sales period got preponed by 5 days,” Mint reported Shrikhande as saying. “The sales usually start on 26 or 27 June, but this quarter it started on 22 June. In the June quarter, we were growing at 10% like to like, but this was extended to 20%. We have never got LTL (like to like) growth like this in the last 5-6 quarters,” reported Mint quoting the managing director.
In the quarter ended June-17, the revenue of Aditya Birla Fashion and Retail Ltd increased by 25%, primarily due to a 27% rise in sales of the apparel retail chain Pantaloons to Rs 731 crore with a like-to-like sales growth of 14%. the company attributed the spike “pre-GST Sale Momentum” in an analyst presentation. Trent, the retail hand of Tata group saw a upswing in revenues from operations, which rose nearly 25% to Rs499 crore for the quarter ended June, while the like-to-like sales growth for the period for Westside was 14%. Westside had previously been posting like-to-like growth of 8-9%.
However, the Q2 sales are likely to be negatively impacted. Govind Shrikhande believes that the 5 days of extended sales in June would impact sales in July. “Everybody was expecting supply issues,” he said. “But, with the Pooja festival coming earlier this year (in October rather than November), we should be able to recover sales after 15 August,” the managing director of Shoppers Stop reportedly told Mint over a telephonic conversation. The July sales were also impacted as there was a reduction in supplies to retailers in the days leading up to the implementation of GST.