Avenue Supermarts Ltd, which operates the popular supermarket chain DMart, on Saturday said its sales declined over 45% in the month of April due to the nationwide lockdown imposed in the wake of coronavirus.
"Our revenue for April was down by more than 45% as compared to April 2019. Our margins have also seen erosion as regulations did not permit us to sell any Apparel and General Merchandise products," the company said while announcing its earnings for the quarter ended 31 March.
During April more than half of the company's stores either remained closed or operated for extremely restricted hours, the company said.
"Significantly large EBITDA declines are to be expected due to lower sales, lower gross margins, higher cost of operations on account of hardship allowance to front line staff during lockdown and higher personal hygiene/store sanitation costs," it added.
DMart's standalone revenue for the quarter ended 31 March grew 23% to 6,194 crore, as compared to ₹5,033 crore in the same period last year. Profit grew 41.4% to ₹287 crore year-on-year, from ₹203 crore.
With certain relaxations being offered under the extended lockdown in May, the company has seen some recovery in sales.
"Post certain relaxations, the month of May has seen some improvement. We were able to open and operate more stores as compared to April 2020. Those relaxations helped the first 14 days’ revenue of May 2020 to increase by 17% over the first 14 days of April 2020," the company said.
DMart added that the supply chain has seen significant improvement as manufacturers also resumed operations and the transport of goods was allowed by local authorities.
"The last seven days have seen further relaxation of lockdown rules and is allowing us to sell non essentials in approximately 35% of the stores," the company said in its statement.
Initial trends indicate that non-essential sales are more need based and currently do not have a discretionary element to it and is specific and targeted, DMart said, adding that this indicates that discretionary sales may take good time to recover to pre-covid times.
While sales have been impacted, the company said that they are seeing some silver linings with certain stores witnessing strong sales of essentials.
"Some of our stores which are functioning on a 24-hour basis for a very long time now have seen revenue trending closer to pre-Covid-19 levels despite not selling non-essentials and having restricted footfalls. We are not sure if this would replicate in all cities, nonetheless it is an encouraging sign in an otherwise uncertain near term outlook," the company said.