On its premium grocery chain Nature’s basket, the company says that it has not been able to deliver the expected growth
Retail chain operator Spencer’s Retail is not looking at aggressive store additions as part of its near-term growth strategy. Instead the company is looking to improve same-store sales growth and sales per square foot.
“We will add on stores. But again, that is not the basis of our growth. We are basing our growth on driving same-store sales growth. And the last four to five months have given us more confidence that we will be able to do that,” Anuj Singh, Chief Executive Officer and Managing Director, Spencer’s Retail, told analysts in an earnings call.
Singh added that the company will keep evaluating opportunities within existing geographic clusters. He said that the company will add three to four stores of Spencer’s in this year. The company improved the sales per square foot from Rs 1,400 in FY25 to around Rs 1,700, with the goal of reaching Rs 2,000 SPSF for Spencer’s format.
On its premium grocery chain Nature’s basket, Singh noted that it has not been able to deliver the expected growth. While the headwinds were external in case of Spencer’s, Nature’s Basket’s growth was impacted by internal headwinds.
“The issues are at two levels. We still have not gotten into that virtuous cycle of synchronising our inventory with what is selling. As a result, we are sitting on high days of stock cover. These are not necessarily fast-moving SKUs. And therefore, our precious working capital is stuck and slow moving, and we do not have enough to fuel the velocity on high-moving SKU,” he explained.
He added that the online part of the business is relatively small, but that is something which the company revamped using the same tech backbone as Spencer’s Jiffy and is ready to accelerate that. The company is looking to drive growth by driving a higher level of sales per square foot and store productivity for Nature’s Basket. “We will turn the clock back and drive some growth on Nature’s Basket,” he added.
On the recent political development in West Bengal, the company said that is expected the newly formed government to focus on on-ground investments, on-ground development activities, which will bode well for consumption. “West Bengal has seen a change in government. And now for the first time in 50 years, there will be centre-state alignment, which will bear well for the state,” he noted.
