After months of slowdown, consumer sentiment is showing an uptick, Kavindra Mishra, MD & CEO of Shoppers Stop tells Viveat Susan Pinto. The retailer narrowed losses in Q1, improved Ebitda margins to 14.7% from 13.4% last year and saw a nearly 9% revenue growth during the April-June quarter. Mishra throws light on the company’s retail strategy for FY26 and capital expenditure plans. Excerpts:
What worked for you in the June quarter and do you see this momentum lasting through the year?
There is a demand improvement that is visible today in retail. We certainly saw an uptick in sentiment in May and June, led by the wedding season. The momentum has continued into July too and we hope to see this continue into August and September as the festive season sets in. Consumers are also becoming more discerning and are willing to spend more if the product meets their aspirations. In a crowded marketplace, premiumisation allows retailers such as us to stand out.
What are you precisely doing in the premium space?
We are driving strong brand IPs like campaigns such as ‘India Weds with Shoppers Stop’ which ensure brand recall, engagement and sales conversions across categories. We are also pushing Black Card events aggressively. These are for members of the First Citizen Club (loyalty programme). We organised 18 such events in Q1 and hope to continue with this as we continue with our premiumisation journey. These initiatives have led to our premium portfolio contribution to grow to 67% (of total sales) in Q1 with an 8% year-on-year growth and 9% in terms of like-for-like growth (same-store sales growth). We hope to see this momentum continue in the first half of FY26 and for the rest of the year. At the same time, the fiscal and monetary policy measures initiated by the government are also acting as strong enablers to retail growth and sentiment.
Where do you see premium portfolio contribution to sales going in FY26?
We hope to add at least 300 basis points to our premium portfolio contribution in FY26, led by the factors I mentioned earlier. Our journey in premiumisation has allowed us to improve productivity. Typically, gross margins improve by at least 1.2 times when a retailer sells a premium product versus a popular (value) product. That is something we will keep driving. And we will also keep a firm eye on operational efficiency as we look to improve margins further in the coming quarters.
What are your retail expansion and capital expenditure plans for FY26?
We plan to open around 7-8 department stores and around 30-40 Intune stores in FY26. We opened 4 Intune stores in Q1 and around 7-8 additional stores are lined up in Q2. The strategy for us as far as Intune is concerned is that we will continue to stay focused on families. This gives us a wider addressable market and helps us cater to more people. Price points are also affordable in keeping with the value retail format. As far as capital expenditure plans are concerned, we are looking at a capex of around Rs 200 crore this year.
What is the plan with the beauty business? It grew only 2% excluding distribution in Q1. What led to the moderation in sales growth rate?
There were some challenges that we faced in the mass beauty segment. But premium beauty and fragrances did well during the June quarter. We see this momentum at the premium end continuing and we remain optimistic about the business. We should be able to deliver double-digit growth for the beauty business from a full-year perspective. It remains an area of growth and investment for us.