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(Photo: Mint)
(Photo: Mint)

DMart converts 2 Mumbai stores into fulfilment centres to cater to e-commerce demand

The stores are in Mira Road and Kalyan. Both these locations have an alternate DMart store within 4 kms, says the retail chain

New Delhi: Avenue Supermarts Ltd, which owns and operates supermarket chain DMart, has closed two of its retail stores in Mumbai and converted them into fulfilment centres to cater to its growing e-commerce business in the city.

The company opened six new DMart stores during the July-September quarter this fiscal taking its store count to 220 with total retail business area of 8.20 million sq. ft across Maharashtra, Gujarat, Daman, Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, Madhya Pradesh, Rajasthan, NCR, Chhattisgarh and Punjab., Avenue Supermarts said in a regulatory filing.

Besides, D-Mart has also expanded its e-commerce operations in select pin codes of Pune City.

"We have closed two of our Mumbai stores for customers and converted them into fulfilment centres (FC) for our ECommerce business. One each in Mira Road and Kalyan," said Avenue Supermarts CEO & Managing Director Neville Noronha.

Both these locations have an alternate DMart store within four kilometres, he added.

"We continue to increase our footprint in Mumbai Metropolitan Region covering additional pin codes. Mira Road and Kalyan FC addition were to deepen our reach and serve customers better in these regions. We have also expanded our E-Commerce operations in select pin codes of Pune City," he said. About its brick and mortar retail business, the company said, "Footfalls are getting better and basket values are reducing month over month."

"Lockdown restrictions due to Covid-19 were further eased during this quarter. Within the continued uncertainty from Covid-19, our business has seen improvement and it continues to gradually progress towards prepandemic levels. Month-on-Month sales have improved during this quarter – August was better than July and September was better than August. The highlight being that footfalls continue to be significantly lower than pre-Covid levels but basket values are significantly higher than pre-Covid levels. Both these data points are trending towards pre-Covid levels. Footfalls are getting better and basket values are reducing month over month," said Noronha.

"Two years and older DMart stores did 87.5% of September 2019 sales in the month of September 2020. We have a total of 158 stores which are 2 years or older. Since August, most of our stores are operating at pre-Covid operating hours and some stores are operating longer hours than before Covid-19. Longer hours are to improve social distancing and giving more options to our shoppers," he added.

The company last week reported a 38.46 per cent decline in its profit after tax to 198.53 crore in the July-September quarter as against 322.63 crore of the corresponding quarter last fiscal.

Its revenue from operation in the second quarter of FY2020-21 was down 11.42 per cent at 5,306.20 crore against 5,990.78 crore in the year-ago period.

As restrictions were further eased during this quarter, its business has seen improvement and it continues to gradually progress towards pre-pandemic levels.

Month-on-month sales have improved during this quarter – August was better than July and September was better than August.

"Since August, most of our stores are operating at pre-COVID operating hours and some stores are operating longer hours than before COVID-19. Longer hours are to improve social distancing and giving more options to our shoppers," he said. While talking about the FMCG and staples demand, DMart said it was “robust". “September 2020 sales of all stores exceeded September 2019 sales for FMCG and Staples while General Merchandise and Garments did lesser sales in the same period. However, discretionary consumption has seen significant improvement over Q1FY21," it said. General merchandise and apparel business contributed 22.7 per cent to the revenue during July-September as compared to 27.3 per cent of the corresponding period last fiscal and said it was "encouraging".

"We couldn’t sell this category of products for nearly 2 months of Q1FY21 due to regulatory restrictions and once permitted we did insignificant sales due to tightening of discretionary spend by consumers," the retail chain said.

"The progress of the pandemic and its impact on consumer spending during the festival period will determine our financial performance for the next quarter. While large suppliers and FMCG business is trending better on sales as well as supplies, supply chains and manufacturing in the non FMCG SME sector will take some time to get back to pre-Covid levels. Longer lead times, a slower response to immediate demand and the biggest festivals so close on the anvil would be more complicated for the non FMCG SME sector. We are providing all necessary support and it’s a matter of time to get all back on schedule. We are glad to state that conversations are now moving from lack of demand to shortage of supplies in these categories," the retail chain added.

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