Trent Ltd, the retail arm of the Tata Group, today said it has started seeing positive results from the recent changes implemented in its Star Hypermarket business.
The company had, nearly a year ago, taken a decision to take a leaf out of the success of its other chains -- Westside and Zudio -- and offer more value for users by focusing on its in-house brands.
Hence, it started focusing on in-house Tata brands such as Tata salt and Tata Sampann, as well as Star Bazaar store brands such as hygiene product Klia, food product Fabsta and personal care-oriented Skye.
"We have applied our playbook to the Star business and are witnessing strong customer traction, instilling a growing conviction to build out this growth engine in the food and grocery space," said Noel Tata, chairman of Trent -- Star Bazaar's parent company -- on Wednesday after revealing the company's third-quarter results.
The improvement has been strong enough to convince the company to make more bets on it.
"On the back of the improving performance, Trent sees it as a key growth engine alongside its core fashion retail business," Tata added.
Indeed, during the latest three-month period (October-December), Star Hypermarket has seen a sharp, 26% growth in its revenue. What is more interesting is that nearly all of this has come from its existing stores, rather than from new stores.
Secondly, the growth was not powered by rising prices, but accompanied by what Trent called a "strong" growth in the overall quantity of merchandise sold -- another indicator of a positive outcome for the change in strategy.
All the major categories of goods -- staples, fresh products and general merchandise -- saw growth, Trent said.
"Given the increasingly positive economics coupled with the consistency of Star's operating performance, we are convinced that we have a differentiated and scalable model," Trent said.
On a company-wide basis, Trent reported strong revenue growth of 50% to Rs 3,686 crore compared to the same quarter a year earlier, boosted by the fast expansion of its fashion retail chains, particularly Zudio.
The company added a whopping 50 Zudio stores during the quarter, 5 Westside stores and 28 under other brands and concepts.
The total store count stood at 715 by the end of December 2023.
Even excluding the impact of new stores, said Trent, Westside and Zudio saw 10% growth in its revenue on a like-for-like basis.
Trent said its emerging category portfolio -- comprising categories such as beauty, innerwear and footwear -- accounted for 19% of its sales.