Spencer’s Retail, a leading multi-format retailer under the RP-Sanjiv Goenka Group, is strategically gearing up to enhance its market presence. With a focus on maximizing profitability and diversifying its business mix, the company has laid out plans to strengthen its core regions, increase the share of Omni-channel business, and introduce higher margin non-food categories. The sixth annual general meeting (AGM) of Spencer’s Retail, chaired by Shashwat Goenka, discussed these strategies and initiatives.
Strategic Business Diversification
Spencer’s Retail aims to tap into the potential of higher margin non-food categories as part of its growth strategy. By emphasizing segments like Apparel and General Merchandise, the company aims to increase profitability through product lines that offer better margins. This strategic shift in the business mix could contribute significantly to the company’s bottom line.
Expansion of Omni-channel Presence
In line with the changing retail landscape, Spencer’s Retail is focused on expanding its Omni-channel business. This approach encompasses a consumer-friendly “Ordered on phone & delivered within 2 hours” proposition, as well as an “App/website based e-commerce proposition.” Currently, these Omni-channel offerings contribute over 12% of the company’s business mix. By enhancing the convenience and accessibility for customers through digital channels, Spencer’s aims to capture a larger share of the evolving retail market.
Localized Growth and New Store Openings
Spencer’s Retail plans to fortify its business by concentrating on its core geographies in West Bengal and Uttar Pradesh. The company seeks to achieve this by opening new stores and increasing its trading area by 10%. This localized approach reflects a strategy to consolidate its presence in areas where it already has a strong foothold, capitalizing on existing customer loyalty and brand recognition.
Entry into the ‘Value’ Segment
In a strategic move to diversify its retail portfolio, Spencer’s Retail ventured into the ‘value’ segment by launching a new hypermarket chain called “Value Market.” The introduction of this chain in January this year marked the company’s entry into the growing ‘value’ segment. The response from consumers has been encouraging, reflecting potential growth opportunities in this market segment.
Profitability Path and Cost Management
Spencer’s Retail is committed to achieving accelerated profitability. The company is meticulously analyzing all cost-related factors, including operating costs and SG&A (selling, general, and administrative) expenses. By optimizing operational efficiency and cost structures, Spencer’s aims to achieve profitability while maintaining a competitive edge in the market.
With a proactive approach towards business diversification, expansion of Omni-channel offerings, and localized growth, Spencer’s Retail is positioning itself for a dynamic future in the retail sector. By strategically entering the ‘value’ segment and focusing on higher margin non-food categories, the company is poised to capture new revenue streams. Through these strategic initiatives, Spencer’s Retail continues to adapt and innovate in response to changing consumer preferences and market dynamics.
