Seeking to grow its market share and counter aggressive expansion from the likes of Mukesh Ambani’s Reliance Retail Ltd, Radhakishan Damani’s discount supermarket chain, DMart plans to boost its store count fivefold.
Neville Noronha, the Chief Executive Officer of Avenue Supermarts Ltd., said in an interview that the company which currently runs the fourth-largest number of convenience stores in India, could scale up the chain from 284 to 1,500 supermarkets. DMart is known for its knockdown prices on everything from lentils to laundry powder to 1,500 supermarkets.
He however declined to give a timeline or estimate the investment needed.
“Large players can happily operate without worrying about each other,” Noronha said. “There’s no need to worry about that for another 20 years — the headroom for growth is awesome.”
The company opened its highest-ever 50 stores in the year through March, it’s most ever, and wants to tap India’s teeming middle-class. Amid rising inflation, this segment is also looking hard for bargain deals – something DMart is known for. Besides adding stores, DMart is also attempting to scale up its unprofitable e-commerce business.
“The sky’s the limit for any brick-and-mortar retailer in the country,” Noronha said. “You have to focus on opening more and more stores” as the organized grocery market in India was nowhere near saturation, he said.
The company has also started selling pizza from one of its supermarkets as it takes on the likes of Domino’s Pizza Inc. “As the economy grows, people have less time, they want comfort food,” said Noronha. “We believe we can offer the same high quality at significantly lower prices.” Noronha said. “In times of inflation the general understanding is people look for more deals,” he said. “People want products available at cheaper prices, so it helps a business like ours.”
Damani, the 68-year-old Indian billionaire and founder of DMart, steered his supermarket empire to a blockbuster listing in 2017. The stock has jumped 1,370% since its listing, giving Damani a net worth of $22.1 billion, according to the Bloomberg Billionaire’s Index.
The company’s net income for the June quarter surged more than six times to 6.4 billion rupees ($80.6 million) compared with the same period last year as the local economy recovered from the pandemic-related curbs. Revenue also nearly doubled. Its online business, however, has remained a weak spot, which has dragged down its stock.
