Shoppers Stop warns of sharp fall in same-store sales

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Shoppers Stop warns of sharp fall in same-store sales

Retail chain ShoppersStop today said it expects the same-store sales to fall sharply to 6-7% by the fiscal end from a high 12% due to unfavourable conditions, and warned that the overall growth of the retail industry will halve next year.

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Retail chain Shoppers Stop today said it expects the same-store sales to fall sharply to 6-7% by the fiscal end from a high 12% due to unfavourable conditions, and warned that the overall growth of the retail industry will halve next year.

"We are seeing a slowdown in the like-to-like sales growth. That is due to a combination of slowdown in the economy, indecisiveness in the manufacturing sector, and the rupee fall. We are seeing a slowdown in sales. In the quarter ended September, the sales growth was 12 percent. Overall, for the year-end it would be 6-7%," ShoppersStop managing director Govind Shrikhande told reporters here.

Same-store sales refers to the differential in revenue generated by a retail chain's existing outlets over a certain period of time compared to same period in the previous year which is helpful to investors/analysts. He added the retail industry that was growing at 20%, would grow at 10% over the next 12 months. The company today announced the launch of its 49th ShoppersStop store.

It plans to take the number to 66 within the next two years. It will invest up to Rs 400 crore to expand presence by opening new stores across formats in the next three years. The firm currently operates departmental stores under the ShoppersStop brand, and the Hypercity hypermarkets apart from several speciality format stores such as HomeStop, Crossword Book Store, Mothercare, Estee Lauder and Clinique. The company is likely to reduce its apparel prices for the private labels by 5 percent due to the softening cotton prices, he said but warned that the non-apparel prices are likely to go up by 10-15% due to the rupee fall.

"Next year, apparel demand should be better than what we are seeing this year. This year the price increased from 15-18 percent which hit the volumes. Volume revival will happen (from next year). The non-apparel will start showing the trend apparel was showing this year. All brands of watches, because of dollar rupee equation, are likely to go up by 10-15 percent," he said. Non-apparel segments contribute to 42 percent of ShoppersStop's revenue and the imported segment is above 30 percent, he added.