5 August 2020 DMart has reopened most stores, and sales have reached ~80% across assortments as customer traffic is gradually returning to stores given the brands value offering. Same-store sales growth (SSSG) has fallen but is not concerning, excluding the high base of last year and select low-performing stores. Management indicated that in terms of store adds, it aims to make up for the lost period of lockdown with ~59 store additions over FY2122 (the next six quarters). B) It would focus on larger sized stores, predominantly in semi-urban and lower tier cities, that may have slightly sluggish metrics in the near term, but bring longer term growth, operating leverage, premiumization, and thus ROIC. However, it believes online is still restricted to the urban markets, where DMart Ready offers both delivery and pick-up options at more attractive pricing v/s online and would wait for the model to turn profitable.
We attended the annual conference call on Avenue Supermarts (D-Mart) to get an insight into the outlook and challenges lying ahead owing to the Covid-19 pandemic. Majority of the questions (as anticipated) were pertaining to future plans regarding its e-commerce play (DMart Ready') and views on intensified competition from new entrants with deep pockets. The management reiterated its stance of not aggressively foraying into ecommerce play and rather focusing on further consolidating its position to be an eminent player in the brick & mortar format. Over the years, D-Mart, through its proven business model, has been able to maintain consistent...
A year ago, its online business - DMart Ready - posted sales of Rs 144 crore with net loss of Rs 51 crore, according to the company's latest annual report.
