Even as the economy endured a marked demand slump in 2019, this doesn’t seem to have much of a bearing on the retail business of Mukesh Ambani - owned Reliance Industries Ltd (RIL). During the third quarter ended December, revenue from the retail segment grew 27.4 per cent to Rs 45,327 crore from Rs 35,577 crore a year ago. With this, the country’s largest retailer didn’t only post the highest-ever quarterly revenue, but also crossed the Rs 1 lakh crore revenue mark in the first nine months of the financial year. Its revenue grew 33 per cent to Rs 1.25 lakh crore.
Amidst a cautionary spending environment, Reliance Retail said it has been able to win customer confidence through its strong value proposition, wide product offering and an engaging shopping experience. “We saw consistent same-store-sales growth and record footfall across stores driven by compelling proposition of great shopping experience,” said Mukesh Ambani, chairman and managing director of RIL. For starters, same-store sales refers to the difference in revenue generated by a retail chain’s existing outlets over a quarter compared to the previous year.
In a regulatory filing, the company said its revenue growth was primarily led by the core retail business — fashion & lifestyle, grocery and consumer electronics — which grew much faster at 35.7 per cent. Earnings before interest, depreciation, taxes and amortization (EBITDA) or operating profit for the quarter was at Rs 2,727 crore, growing 62.3 per cent year-on-year.
Apart from a robust performance in the third quarter, the company’s frequent bouts of investment in its retail vertical to capitalize on the depressed market further buttress Reliance’s push towards its the consumer business.
During the quarter, Reliance Retail added 456 stores with a focus on tier 2 cities and beyond taking its total store count to 11,316 spread across 6,900 towns. The company said it had more than 176 million customers walk into their stores during this festive quarter with registered customers at 117 million, growing 42.6 per cent over the same period last year. Across the fashion and lifestyle space, Reliance said the business continues to strengthen its offline-online capabilities.
The retail vertical is also investing in data analytics to go hyper local in the next 6-12 months. It is now testing technology which would enable customers to buy online and take a refund offline in an effort to create a seamless shopping experience. The company is targeting 70 per cent growth in business in 2020.