Kishore Biyani-owned Pantaloon Retail’s same-store sales grew for three months in a row, after dipping in December, indicating a sustained revival in consumer spending, analysts said.
Pantaloon’s March sales in the value retailing segment grew by 5.32 per cent and by 4.28 per cent in the lifestyle segment. Total sales for the month rose 30.2 per cent, to Rs 574.56 crore.
The steady growth for three months came after the country’s biggest retailer witnessed a drop in value and lifestyle retailing in December. Same-store sales in value retailing climbed 4 per cent in January, after a 4 per cent drop in December. Lifestyle sales grew 12 per cent in the month, after falling 14 per cent in December. February sales in the retailing segment grew by 5.32 per cent and by 4.44 per cent in the lifestyle segment.
“At a certain price point, there is demand. India’s consumption story is intact,’’ said Kishore Biyani, managing director, Pantaloon Retail. “Ultimately, consumers won’t stop buying food and other basic necessities.’’
Same-store sales compares sales of stores that have been in the business for a year or more. The measure allows investors to determine what portion of new sales has come from growth and from opening new stores. The figures are usually released by retail companies every month.
In absolute terms, value retailing rose by 25.08 per cent to Rs 346.32 cr in March while lifestyle retailing grew by 17.25 per cent to Rs 115.96 cr, said the company’s web site. “We are looking forward to a sustained growth, especially since sales have been erratic in the past few months,’’ said Raghav Sehgal, an analyst with Angel Broking.
Because of the ongoing slowdown, retailers have been struggling to clear inventories in the past few months to free cash and shorten working capital cycles. Some are keeping less stock than earlier.
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“The worst should be behind us,’’ said Biyani. Pantaloon’s July-March net sales (the company fiscal year ends in June) rose 33.5 per cent to Rs 5,363.52 cr, despite the slowdown. The higher sales can be partly attributed to expansion undertaken by the company.
However, Pantaloon’s home retailing sales for March, like its previous months, registered a 10.29 per cent fall, as consumers deferred purchases of new homes.