Kishore Biyani-owned Pantaloon Retail’s same-store sales in January grew at the second slowest pace in five years as consumers curbed spending and the retailer struggled to survive the downturn by offering discounts.
The slow growth comes after the retailer’s value and lifestyle same-store sales registered a negative growth in December.
Pantaloon’s same-store sales in the value retailing segment
climbed 4 per cent in the month of January after dropping
4 per cent in December.
Lifestyle sales grew 12 per cent in the month after declining 14 per cent in the previous month.
"Overall the market has improved and since we are the mass retailers we are gaining. Home segment has also picked up compared to December. Same-store sales growth in mobile, furniture and electronics which had dropped in December has also picked up,” said Kishore Biyani, managing director, Pantaloon Retail.
Same-store sales, a common metric in the retail industry, 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 sales growth and what portion from opening new stores. The figures are usually released by retail companies every month.
Analysts attribute the spurt in sales to the month long "The Great Indian Shopping Festival” which was launched on December 13. The sale was extended till January 7. The retailer also unveiled another 3-day shopping festival to coincide with the Republic day, which helped push the sales higher.
"December-January is full of discounts which push up customer’s traffic. The real picture will emerge when a chain stops the offer. Retailers are not out of the woods yet. Consumers are still feeling conservative about spending and cutting back expenses,” said Devangshu Dutta, chief executive, Third Eyesight, a Gurgaon-based business consultancy.
Analysts covering the company’s stock say the future growth for Pantaloon isn’t robust and average sales of the country’s biggest retailer may be contained at Rs 500 crore a month compared with Rs 690 crore in January.