Pantaloon Retail has returned to a double-digit growth rate in same-store sales (SSS) in the lifestyle segment. The country’s largest retailer, which saw either a decline or a single-digit growth rate at best in SSS since November 2008, posted an increase of 11 per cent for the December quarter, aided by higher consumer spending in the category.
A common metric in the retail industry, SSS compares sales of stores that have been in the business for a year or more. This measure allows investors to determine what portion of new sales has come from sales growth and what portion from opening new stores.
Lifestyle retailers like Shoppers Stop, Pantaloons and Lifestyle were hit hard during the slowdown as shoppers curbed spending on such lifestyle items as apparels, consumer durables and so on.
“Customer sentiment was superior in the last quarter and we saw a lot of action in this category. We hope the momentum will continue in the coming quarters,” Pantaloon Retail Director Rakesh Biyani said.
In terms of retail sales mix also, the share of the lifestyle segment went up from 27 per cent in the second quarter of 2008-09 to 29 per cent in 2009-2010 (Pantaloon follows a July-to-June financial year). The company posted a 51 per cent jump in its net profit at Rs 50.67 crore and a 25 per cent jump in net sales at Rs 1,912.84 crore for the second quarter ended December 31, 2009.
Analysts attributed the spurt in sales in the lifestyle segment to promotional activities of retailers and a pent-up demand. “Consumers were very careful and postponed purchases of lifestyle products. Now, with the overall improvement in economy, they are once again comfortable spending on these goods,” Boston Consulting Group Partner Anand Raghuraman said.
Pantaloon’s gross operating margins also went up 10.7 per cent in the second quarter of 2009-10, compared with the same period of the previous financial year.