India’s leading modern retailer Shoppers Stop Ltd. is looking at 12 per cent sales growth in 2017-18 year and focusing on improving the profitability, a company official said on Tuesday.
“For the entire year, we are looking at 12 per cent overall sales growth and the profitability growth should be double of the sales growth for the year… growth of bottomline should be 25 per cent,” company’s Customer Care Associate and Managing Director Govind Shrikhande said.
He said the retailer was eyeing 8-10 per cent like-to-like sales growth (sales growth from same store) in the current fiscal.
“We drive the profitability in a bigger way and are looking at increasing productivity in the existing stores,” he said.
He said its Omnichannel execution was on track to be ready by the third quarter and the retailer had envisaged an investment of Rs 60 crore for the project.
He also said the modern retailer posted a 20 per cent like-to-like sales growth in the first quarter of the current fiscal.
“Out of the 20 per cent growth, we achieved 10 per cent sales growth in April-May period and additional 10 per cent came in June because of preponement of sales due to Goods and Services Tax ( GST),” Shrikhande said.
Post-GST, a slow down in sales in July was witnessed due to “affected supply” but in August the recovery had already started, he said, adding that in the first quarter, the retailer witnessed a 22 per cent overall sales growth.
The retailer which has currently 79 operational stores across India, is targeting to open four-five more stores in the remaining period of the current fiscal.
Speaking on the profitability drive, he said: “We have shut down three stores in the last fiscal and going ahead, we would continue to evaluate stores that are underperforming… we have taken an impairment of more than Rs 5 crore.
“Going forward, we are not going to see that level of impairment. We will be back on profit track from second quarter onwards,” Shrikhande said.
The retailer narrowed down its losses in the first quarter over same period last year but it did make profit in 2016-17.
According to him, the retailer plans for a Rs 100 crore capital expenditure in the current fiscal.
He said its online sales growth in the first quarter was around 70 per cent and betting big on Omnichannel, the retailer was expecting online sales to grow by 100 per cent in the fourth quarter of the financial year.
According to him, the online sales was contributing one per cent of its revenue last year but it should be two per cent by the end of this year.
“Our target is to achieve 10 per cent (online sales’ contribution to overall revenue) over the three years time,” he said.