Fastest growth rate seen in 5 years
Retailers and eateries expand their play to cash in on rising demand.
Reliance Retail, Dmart, and Starbucks are among the top twelve companies to open nearly 4,700 stores.
Mumbai | New Delhi: Nearly a dozen listed retailers and quick-service restaurant chains opened nearly 4,700 doors, or about 13 new stores every day, on average during FY23, their fastest expansion rate in at least five years as demand for discretionary and lifestyle products picked up.
During the last fiscal year, the top 12 companies, including Reliance Retail, Aditya Birla Fashion and Retail (ABFRL), DMart, Tata’s Rent, and Starbucks, reached a combined store network of 30,520 stores, according to data sourced from their latest investor presentations. In FY22, their overall store strength was 25,821.
“Our ability to execute, find the right places, ensure they are built to suit, and everything is working well,” said Titan Company CEO (jewellery) Ajoy Chawla. “Most of the franchisees want the second, third, fourth, or fifth store, and we are unable to fulfil their desire. They are even happy to take the next store 100 km away, or 200 km away in another city, even internationally.”
With competition also intensifying in categories such as quick-service restaurants, it triggered aggressive store expansion. For instance, Starbucks, which started India operations in October 2012, recorded the fastest store expansion, adding 71 stores to take the overall door count to 333 last fiscal.
“As we grow in size, as people become more aware, as the economy grows, more people become aware of the offerings and want to participate. You need to not just open stores, but ensure that when you open stores, they are profitable and do the numbers that they are supposed to,” Sushant Dash, CEO of Tata Starbucks, told ET earlier this month.
Apart from accelerated store launches, many retailers also opened larger stores in marquee properties to give shoppers a better experience, indicating a significant increase in retail space. Anarock data suggests the share of transactions sized between 2,000 sq ft and 5,000 sq ft increased to 28% in 2022 from 24% a year ago. This is despite the online channel increasing its share of their overall sales contribution since the pandemic began.
Sales of organised retail segments grew 34% during FY22–23 compared to pre-pandemic (FY20), a report by the Retailers Association of India (RAI) said. However, sales of lifestyle, apparel, and discretionary products moderated for the second consecutive month to 6% in April due to a high base year, forcing a few retailers to revise their store expansion outlook.
Source – Times Of India
