Kishore Biyani's Pantaloon Retail, the country's largest listed retailer, has posted an 87 per cent growth in Diwali sales from its value retail formats — Big Bazaar and Food Bazaar — compared with the year-ago period, the highest growth rate in three years, according to the latest investor update numbers.
The company reported sales of Rs 455.34 crore in October 2008 as against Rs 243 crore it posted in October 2007. On the same store level (excluding stores that were opened after October 2007), the company has posted a 49.26 per cent growth in value formats.
In comparison, the same store sales growth in 2007 dipped by 25 per cent and in 2006, sales grew marginally by 7 per cent. "Consumers are spending more on value for money products. All categories in food and fashion are doing well. In fact, the same store growth of 50 per cent in value formats is a record increase for us," said Kishore Biyani, managing director of Pantaloon Retail.
The period of October-November, which has festivals such as Dussera, Ed-Ul-Fitr and Diwali among others, accounts for 25-30 per cent of consumer durables sales and 20-30 per cent of apparel sales, according to industry estimates.
"During slowdown, people always go for downgrades and buy at discount stores. Moreover, most of the retailers went for aggressive expansion in the last two years, which takes eight to nine months to break even. This is contributing to their sales growth," said Purnendu Kumar of retail consultancy Technopak Advisors.
In lifestyle retailing, which includes its fashion apparel store chain Pantaloons, the company recorded a growth of 66 per cent in October 2008 compared to the year-ago period and in home retailing — which includes its consumer durable format eZone and Home Town Bazaar — it saw an increase of 78 per cent.
However, at the same store level, the company has seen October growth at 33 per cent and 23 per cent in lifestyle and home retailing respectively.
"Before Diwali when the markets were down, we saw a dip in the sales of furniture and electronics. That picked up again during Diwali," Biyani said.
Biyani is now concentrating mainly on value formats and low-cost models such as Big Bazaar and KB's Fair Price Stores. To beat the economic slump, he has also diversified into small convenience store formats called Big Bazaar Best Deals, rural retail venture Aadhar, and home solutions venture Home Town.
On September 30, the company opened three Big Bazaars and is expected to add six more by the year-end. The firm plans to have a total retail space of 15-16 million sq ft by March 2009 from 11 million sq. ft in FY08 and aims to achieve total revenue of Rs 10,000 crore in the current financial year, up from Rs 6,500 crore in the previous financial year.
(With inputs from Neeraj Thakur)
