It is reported that Spencer’s Retail, the retail arm of the RPG group, may take another 18 months to break even.
Though the company has already achieved the store level break even in the first quarter of 2010-11 and has lowered its losses to Rs 130 crores declining by 41 % compared to Rs 220 crores recorded in 2009-10.
The company is going to drive its growth strategy by opening more hypermarkets. Consumer behaviour suggests modern shoppers are evolving and prefer shopping at larger stores, which offer merchandise across categories.
According to a report by financial services firm Emkay, Spencer’s management is taking various steps to improve the company’s performance. The management has adopted a revenue-sharing model while opening stores, instead of the fixed-rent model. The company’s growth in same-store sales is expected to stand at around 14 per cent.