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Sarah \n Jacob & Sagar Malviya, The Economic Times<\/i><\/p>\n Sarah \n Jacob & Sagar Malviya, The Economic Times<\/i><\/p>\n
Bangalore\/New \n Delhi, 30 May 2012<\/i><\/p>\n
![](\"..\/images\/lifestyle-stores-weak-lfl.jpg\")
Sluggish \n demand has led lifestyle retail chains to post weak same-store \n sales in January-March 2012 and lower growth estimates for this \n fiscal. <\/p>\n
Driven by new stores, most retailers clocked 20-30% sales growth \n in January-March. But same-store sales, or sales from stores that \n were operational last year, grew in single digits. Samestore sales \n are an important indicator of consumer demand and the health of \n the retail industry. Retailers don’t expect things to improve \n this fiscal as demand is subdued. The downturn began after Diwali, \n and the increase in the prices of essential commodities, lower \n salary increments, adverse macro-economic conditions and government \n inaction dented consumer confidence. <\/p>\n
"We would have targeted double-digit like-to-like growth \n if the year looked better," said Govind Shrikhande, MD of \n department store Shoppers Stop. Shoppers Stop’s revenues grew \n 27% to Rs 621.35 crore in the January-March quarter, but samestore \n sales grew 10%. Volume growth contributed just 1% to the increase \n in same-store sales while price hikes made up the rest. "Prices \n have risen and imports are getting costlier. These developments \n start impacting consumer demand after a point," said Shrikhande. \n <\/p>\n
Rival Lifestyle International, which operates stores under the \n Lifestyle and Max brands, said it clocked sales of over Rs 2,500 \n crore last fiscal and has targeted revenues of Rs 4,500 crore \n by 2013-14. <\/p>\n
Demand Subdued in April-May <\/p>\n
"The second half of last year was not good and it’s apparent \n in our bottom line," said Lifestyle International MD Kabir \n Lumba. He refused to divulge figures as the company is unlisted. \n "Given the current market conditions, we have lowered our \n growth estimates by around 10%," Lumba added. <\/p>\n
Pantaloon Retail posted an increase of 7.6% in sales for the \n three-month period ended March 2012, but same-store sales rose \n just 3.6% – the lowest in 13 quarters. Retailers say demand is \n subdued in the first two months of the current fiscal as well. \n "The overall sentiment has been poor and it is reflecting \n even in May," said J Suresh, CEO of Arvind Lifestyle Brands \n and Retail. The 10% excise duty on branded garments last fiscal \n has impacted Arvind’s value format Megamart, which posted a growth \n of 11% in same-store sales during the quarter against an 18% increase \n in the year-ago period. However, its lifestyle brands business \n – which includes Arrow, US Polo and Flying Machine brands – grew \n 27% in the fourth quarter in terms of same-store sales. <\/p>\n
Same-store sales have slowed down despite retail chains extending \n end-of-season discounts and advancing them by up to three weeks \n to liquidate inventory. "This helped them post higher sales \n on a sequential basis. However, margins of most retailers took \n a hit," said Sangeeta Tripathi, a senior analyst with Sharekhan. \n Margins were further squeezed by higher interest rates, fuel and \n real estate costs. <\/p>\n
The slowdown in like-to-like sales has forced retailers to explore \n new strategies to drive sales. Shoppers Stop, for instance, is \n focusing on store events as well as new loyalty card schemes and \n has recently lowered prices of private label brands by 5%. <\/p>\n
Experts say stores can boost sales by improving shelf displays \n and promoting private labels. "Significant work can be \n done to make the product on the shelf more compelling for the \n buyer, both in terms of merchandising and placement. Retailers \n can also differentiate by looking at their private labels not \n just as additional margins but as brands that fill a gap," \n said Devangshu Dutta, chief executive of retail consultancy Third \n Eyesight.<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"
Sarah Jacob & Sagar Malviya, The Economic Times Bangalore\/New Delhi, 30 May 2012 Sluggish demand has led lifestyle retail chains to post weak same-store sales in January-March 2012 and lower growth estimates for this fiscal. Driven by new stores, most retailers clocked 20-30% sales growth in January-March. But same-store sales, or sales from stores that […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-2870","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"\n