Ace Investor Radhakishan Damani’s supermarket chain Dmart (Avenue Supermarts Ltd) plans to boost its store count five-fold. The retail chain plans to grow its market share and compete with the likes of Mukesh Ambani’s Reliance Retail Ltd. which is expanding aggressively. In addition, it is planning to scale up its online business, Dmart Ready.
Avenue Supermarts Ltd. currently owns the fourth largest number of convenience stores in India and is known for its knockdown prices on essentials. The management has declined to give a timeline or estimate the investment needed as of now.
In line with its objective, the company opened its highest-ever 50 stores in the year through March. According to researchers, the company wants to tap India’s growing middle-class, which accounts for about 1.4 billion people. According to a report by brokerage Motilal Oswal, Dmart is likely to add 135 outlets by March 2024.
Inflation is heightened in the current situation and people look for more deals at this point. They want products at lower or competitive prices, and this helps a business like that of Dmart, said Neville Noronha, the Chief Executive Officer of the company.
Dmart has also started selling pizzas from one of its supermarkets and it might compete with the likes of Domino’s Pizza Inc.
“As the economy grows, people have less time, they want comfort food,” said Noronha. “We believe we can offer the same high quality at significantly lower prices,” he added.
Radhakishan Damani, a self-made billionaire and founder of Dmart steered his supermarket empire to a stellar listing in 2017. Avenue Supermarts Limited reached a 52-week high of ₹ 5900.00 apiece and a 52-week low of ₹ 3186.00 apiece.
The company’s share price has increased by 3.84% in the past five days and by 12.43% in the past month. However, its share price fell by more than 18% in the month of May amid a broader market correction led by FII selling. From that point, its shares have gained 37.4%. They are trading at ₹ 4430 levels currently.
Dmart has a hybrid model unlike Amazon and Big Basket which rely on delivery-based distribution models. Dmart’s online venture is like a neighbourhood store. It has small stores where customers can pick up products they have ordered online. Currently, it has about 284 supermarkets that have generated a revenue of ₹ 27,454 per square foot, almost three times that of its rivals in India.
Written by Simran Bafna
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