Shashwat Goenka, chairman, Spencer’s Retail, ET Retail

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New Delhi: Spencer’s Retail Limited, part of RP Sanjiv Goenka Group, has seen muted growth for the quarter that ended September 30, 2023. It took some hard decisions to improve profitability through the closure of loss-making stores in non-strategic geographies in South India, Shashwat Goenka, chairman of the company said in a quarterly performance update.

During the quarter, it closed 22 high loss-making stores at non-strategic locations in India. Currently, Spencer’s including its food products retail chain Natures Basket, has 167 stores across the country.

Spencer’s Q2 performance

Spencer’s Retail has reported a 30 per cent rise in year-on-year consolidated net loss at Rs 70.12 crore in Q2 FY24 as against a loss of Rs 53.78 crore in Q2 FY23, according to a regulatory filing.

Also, it saw a decline in its total income at Rs 577.10 crore in Q2 FY24 as against Rs 654.35 crore in the same period of the last fiscal.

As per the BSE filing, the firm’s expenses reduced to Rs 647.31 crore in Q2 FY24 as against the total expenses of Rs 708.24 crore in Q2 FY23.

However, the firm has witnessed an improvement of 65 bps in the gross margins despite a hyper-competitive operating environment. Goenka said the company will stay committed to driving both top line and profitability in the balance part of the fiscal.

Further, sharing some positives in the overall performance, Goenka said, “Our ‘Out-of-Store’ business has delivered a positive EBITDA for the quarter at GMV of Rs 76 crore with a sustainable business mix of ~13%. In the latter half of the quarter, we launched our ‘Express Delivery’ proposition in Kolkata city (1-hour delivery from a choice of over 50,000 SKUs). The initial response has been encouraging and we continue to scale this whilst maintaining positive unit economics.”

As per the regulatory filing, Nature’s Basket has delivered 8 per cent growth on a standalone basis and an improvement in gross margin percentage by 241 bps on QoQ basis.

Also, the company said its gifting business ‘The Gift Studio’ has constantly delivered high growth across all the channels whilst delivering healthy margins.