retail analysis: shoppers stop
Post on 27-Jan-2015
407 Views
Preview:
DESCRIPTION
TRANSCRIPT
RETAIL ANALYSIS : Shoppers Stop
INDEXIndia : Retail Industry Overview 2011
Shoppers Stop: An Overview
History
Store Formats
Strategic Alliance
Type Of Retail Outlets
Location
Approach
Segmentation, Targeting & Positioning
Merchandising Strategy
Financial Analysis
Loyalty Program
SWOT Analysis
Competitor Analysis
Impact Of 2008 Recession
International Affiliations & Acquisitions
Indian Retail Market Share: 30% of GDP Share of retail in private consumption: 53.3% Total retail market : Rs. 1,948,916 cr. Organized retail market: Rs. 126,680 cr. (6.5% of total
market) Growth rate of organized retail: 17.39% YOY
INDIA : RETAIL INDUSTRY OVERVIEW 2011
Source: India Retail Report 2011
HEADQUATERS Eureka Towers,9th Floor, B Wing, Mindspace, Link Road,Mumbai, Maharashtra-400064
INDUSTRY RetailTYPE Public CompanySTATUS OperatingCOMPANY SIZE 8000 employeesNUMBERS OF STORES 492011 REVENUES Rs. 439.2 crore NET PROFIT Rs. 11.7 croreTOTAL RETAIL AREA 3.93 million sq. ft.FOUNDED 1991
SHOPPERS STOP: AN OVERVIEW
Source: http://corporate.shoppersstop.com/
About SHOPPERS STOP Ltd.
Shoppers Stop Ltd., a pioneer in modern retailing in India, has been promoted by K Raheja Corp. Group (Chandru L. Raheja Group), one of the leading groups in the business of real estate development and hotels in the country.
Shoppers Stop Ltd along with its Subsidiary Company Hypercity Retail (India) Ltd and Joint Venture Companies Timezone Entertainment Pvt. Ltd and Nuance Group (India) Pvt. Ltd. operates more than 3.93 million sq. Ft. in the country.
Shoppers Stop and its associate companies are involved in retailing through department stores, specialty stores, entertainment zones and large hypermarkets.
Management- SHOPPERS STOP Ltd.
Chandru L Raheja Chairman / Chair Person B S Nagesh Vice Chairman
Govind Shrikhande Managing Director Ravi C Raheja Director
Deepak Ghaisas Director Gulu L Mirchandani Director
Neel C Raheja Director Nitin Sanghavi Director
Shahzaad S Dalal Director Nirvik Singh Director
SHOPPERS STOP: AN OVERVIEW
Source: http://corporate.shoppersstop.com/
Retail Mix/Year 1991 1992 1993 1994 1995 1996
Location
Began the modern
retail revolution in
India with the launch of Men’s
ready-to-wear store
at Andheri(Mumbai)
First step towards
pan-India presence.
Launched its second store in
Bengaluru
Consumer service
Launched an exclusive loyalty program titled
“The First Citizen’s Club”
Merchandise assortment
Offering expanded to
include suiting,
boyswear and ladies
merchandise
Added Casuals, Kidswear and Non-apparel section(Jewellary,
Fragnances, Cosmetics and Watches) making
Shoppers Stop India’s first ever departmental store
Launched “STOP” the first in-house label
Communication Mix
Began its journey of exciting marketing
promotions and in-store excitement with the first of
its kind “Festival of Britain”, celebrated in association with the
commercial department of British Consulate
HISTORY OF SHOPPERS STOP
Source: http://corporate.shoppersstop.com/
HISTORY OF SHOPPERS STOP
Retail Mix/Year 1997 1998 1999 2000 2001 2002
Location
Opened third store in
Hydrabad
Retail revolution took roots in North
India with the launch of stores in Ansal Plaza(Delhi) and
Jaipur (4th & 5th store)
Opened stores at Chennai and
Chembur (Mumbai )(6th & 7th store)
Opened stores in Pune and Bandra (8th and 9th store)
Opened store in Kandivli (Mumbai)
(10th store)
Consumer service
Launched a co- branded credit
card for its loyalty members in
association with HSBC
Communication Mix
Launched Prikrama, a festival to
celebrate Indian tradition and
culture
New Formats
Acquired Crossword-India’s leading retail
book chain
AccomplishmentsShoppers Stop
incorporated as a body corporate
Sole retailer to be awarded the Intercontinental
Group of Department Stores (IGDS) membership
Implemented JDA Retail ERP. First
retailer to adopt ERP
Source: http://corporate.shoppersstop.com/
HISTORY OF SHOPPERS STOP
Retail Mix/Year 2003 2004 2005 2006 2007
Location
Stepped into East with the launch of store in Kolkata.
Also opened stores in Mulund(Mumbai) and Gurgaon
(11th, 12th & 13th )
Opened stores in Malad (Mumbai),
Kolkata and Bangalore
(14th, 15th &16th)
Opened stores in Pune, Juhu (Mumbai), Bangalore and
Ghaziabad (17th ,18th, 19th and 20th )
Opened stores in Mumbai and Lucknow (21st
and 22nd )
Merchandise assortment
Created movie merchandise history with unveiling of the
Om Shanti Om collection
Communication Mix
Brand positioning changed from “Feel the experience to Shopping.
And beyond”
Celebrated the launch with Sharukh Khan, Deepika
Padukone and Arjun Rampal modelling the cloths at a
fashion show.
New Formats
HomeStop- Home need specialist store launched
in Bengaluru .Launched MAC.
Crossword became a wholly owned subsidiary
Launched Mothercare in India and F&B
outlets Brio and Desi Caf.
Bought 45% of Timezone India
Signed a 50:50 JV with the Nuance Group for Airport
RetailingSigned an MOU with Home
Retail Group of UK to enter into a franchise arrangement for the
Agro formats of catalogue & internet retailing
Acquired 19% stake in Hypercity Retail (India) Ltd.
AccomplishmentsVoted as India’s
most favored retail destination of the
year by Images Retail Reward
IPO oversubscribed overall by 17.25 times.
Declared “Retailer of the Year” at Images Fashion Forum
‘Gold Shield’ Award for excellence in Financial
reporting for year 2006 in the category of “Manufacturing and
trading Enterprises” by ICAI
Source: http://corporate.shoppersstop.com/
HISTORY OF SHOPPERS STOPRetail Mix/Year 2008 2009 2010 2011
Location
Expanded footprints to new cities like Bhopal, Amritsar and
Aurangabad. Also added stores in existing
cities like Bengaluru, Mumbai and Hydrabad taking store tally
to 36 stores across 15 cities
Expanded to 49 stores across 22 cities
Merchandise assortment
Pioneered mascot licensing in the
categories through exclusive tie-up for
certain products with Vodaphone for their
product brand mascot Zoozoo
Communication Mix
Shoppers stop repositioned and
reinvented as a “Bridge to luxury” brand with
unveiling of the new logo and tagline, “START SOMETHING NEW”
New Formats
Increased stake in Hypercity Retail (India) Limited to 51%
AccomplishmentsAwarded the “Emerging
market retailer of the Year” at the World Retail
congress in April 2008
Recognized as ‘Most Respected Company in Retail
Sector’ by Business World
Source: http://corporate.shoppersstop.com/
Shoppers Stop Ltd. Consolidated with SSL
SS Department Stores Business68% Sales Contribution
Subsidiary Companies 30% Sales Contribution
JV Companies 2 2% Sales Contribution
•No of stores: 43 (incld. 2 duty paid airport stores) •GFA: 24.58 lacs sq ft. •Sales for 6 months as of Sep,2011 : Rs 920 Cr •Sales for full year as of March, 2011 : Rs 1676 Cr
• No of stores: 8 • GFA: 1.37 lacs sq ft.
No of stores: 35 GFA: 0.14 lacs sq ft.
•No of stores: 7 •GFA: 0.35 lacs sq ft.
•08 – 09 : 8.0 lacs visitors •10 – 11 : 35 lacs visitors
SSL Stake51%
• No of stores: 10 • GFA: 10.64 lacs sq ft. • Sales for 6 months as of Sep 2011 : Rs. 369 Cr • Sales for full year as of March 2011 : Rs 597 Cr
SSL Stake100%
• No of stores: 84 • Own Stores : 43 • GFA: 2.52 lacs sq ft.
SSL Stake50%
•No of stores: 1 •GFA: 0.2 lacs sq ft
• No of stores:14 •GFA: 0.97 lacs sq ft.
SSL Stake45%
Note : Above figures as of 30TH September 2011. GFA: Gross Floor Area
Well diversified portfolio to capture the consumer’s wallet share
SHOPPERS STOP FORMATS
Source: Shoppers Stop Annual Report 2010-11
• Shopper's Stop Ltd. has entered into a non exclusive retail agreement with world-renowned cosmetics major Estee Lauder to open M.A.0 Cosmetics stores in India.
• Shopper's Stop Ltd. has a 19% stake in Hypercity Retail (India) Ltd.
• Mothercare PLC of UK, the largest specialist retailer for infant and toddler care, is now in India.
• Shopper's Stop Ltd.'s entry into airport retailing is marked by a joint venture with The Nuance Group AG of Switzerland, the world's leading airport retailer.
• Shopper's Slop Ltd has forayed into the Entertainment sector by acquiring a 45% stake in Timezone Entertainment Private Limited which is in the business of setting up & operating Family Entertainment Centers (FECs). It has 5 outlets in Ahmedabad, Hyderabad. Kolkata and Mumbai.
STRATEGIC ALLIANCE
Source: Shoppers Stop Annual Report 2010-11
TYPE OF RETAIL OUTLETS
Shoppers Stop Ltd.
Departmental Store-Shopper’s Stop- 43 Specialty Retailing-93
Home Products
Retailing- HomeStop
(8)
Beauty, Cosmetics Retailing- MAC, Estee Lauder Clinique
(35)
Crossword Boo
k store(43
)
Parenting Products- Mothercare(7)
Hypermart- HyperCity -10
Source: Shoppers Stop Annual Report 2010-11
LOCATION
As on 30th Sep 2011
CitySS
Dept. CrosswordHome Stop
Mother care
MAC/Estee/
Clinique Hypercity TotalAmritsar 1 1 1 1 4
Bangalore 5 9 2 1 4 2 23Chennai 2 1 1 2 6
Delhi 5 2 1 1 9 18Gurgaon 1 1
Hyderabad 4 5 1 2 1 13Jaipur 2 1 3
Kolkatta 3 2 5Lucknow 1 1 1 3Mumbai 8 19 2 2 11 3 45
Noida 1 1 2Pune 3 1 1 2 7
Ghaziabad 1 1Siliguri 1 1
Durgapur 1 1Bhopal 1 2 1 4
Ludhiana 1 1 2Aurangabad 1 1 2
Indore 1 1 2Vijayawada 1 1 1 3
Total 43 43 8 7 35 10 146
More than 3.93 million sq. ft. area, across 20 cities
Source: http://corporate.shoppersstop.com/investors/presentation-analyst.aspx
NUMBER OF STORES
1 2 3 5 7 9 10 13 16 20 22 27 31 35 431991 1995 1998 1999 2000 2001 2002 2003 2004 2005 2006 2008 2009 2010 2011
0
2
46
810
1214
16
1820
2224
2628
30
3234
3638
4042
4446
1 1 13 3 3 3 4 4 5 6
10 11 12 13
1 11 2 2 2
2 34
4
44
78
1
12
4 5
6
7
910
10
13
13
17
12
22
33
3
5 Sum of WestSum of EastSum of SouthSum of North
Source: Shoppers Stop Annual Reports, http://corporate.shoppersstop.com/
Delhi Gurgaon Amritsar Jaipur Ghaziabad Lucknow NoidaDelhi Haryana Punjab Rajasthan UP
0
1
2
3
4
5
6
North
Hydrabad Bangalore ChennaiAP Karnataka Tamil Nadu
0
1
2
3
4
5
6
South
Aur
anga
bad
Mum
bai
Pune
Bhop
al
Indo
re
Jaip
ur
Maharashtra MP Rajasthan
02468
1012
West
Durgapur Kolkata SiliguriWest Bengal
0
0.5
1
1.5
2
2.5
3
3.5
East
In North and West Shoppers Stop is entering new cities while in South it is restricting itself to only 3 cities. In East also it is expanding its market slowly.
Source: Shoppers Stop Annual Reports, http://corporate.shoppersstop.com/
Amritsa
r
Aurangab
ad
Banga
lore
Bhopal
Chennai
Delhi
Durgapur
Ghaziab
ad
Gurgaon
Hydrabad
IndoreJai
pur
Kolkata
Luck
now
Mumbai
NoidaPune
Siligu
ri0
2
4
6
8
10
12
East North South West0
2
4
6
8
10
12
14
16
18
5
1110
17
APDelh
i
Haryan
a
Karnata
ka
Mah
arash
tra MP
Punjab
Rajasth
an
Tamil N
adu UP
Wes
t Ben
gal
0
2
4
6
8
10
12
14
16
45
1
5
14
21
21
3
5
Shoppers Stop’s main market is North and West. Also in West it is mainly focused in one state and mainly Mumbai city. Also it has more number of stores in metros as compared to non-metros.
Store Division: City Wise Store Division: Zone Wise
Store Division: State Wise
Source: Shoppers Stop Annual Reports, http://corporate.shoppersstop.com/
TYPE OF APPROACH
METRO AND TIER 1CITIES
SSL will open nearly 80 per cent of the new stores in the
top 24 cities.
75 per cent of the total sales of SSL comes from metros and Tier-1 cities.
SSL aims to stick to the top 10 cities
including Pune,
Bangalore, Hyderabad and metro
cities.
VISION
To be a Global
Retailer in India and Maintain
No.1 position in the Indian Market in the Department
Store Category.
Bridge to Luxury
Premium
Contemporary
Popular
Mass
2005
2009
TRANSITIONED THE SHOPPERS STOP BRAND FROM PREMIUM TO BRIDGE-TO-LUXURY
Source: http://corporate.shoppersstop.com/investors/presentation-analyst.aspx
SEGMENTING
Fall between the age group of 16 years to 35 years,
The majority of them being families and young couples
With a monthly household income above Rs. 20000 and an annual spend of Rs.15000
Shoppers’
Stop’s core
customers
represent a
strong SEC A skew
A large number of Non - Resident Indians visit the shop for ethnic clothes in the international environment they are accustomed to.
Source: Shoppers Stop Investors Presentation
TARGETING
They started in 1991 as a Men’s ready to wear store
Offering expanded to suiting's, boys and ladies merchandise in 1992
1993- Added casuals, kidswear, jewellery, fragrances, cosmetics and watches making Shopper’s stop India’s first Departmental store.
Source: http://corporate.shoppersstop.com/
POSITIONING
The evolution of the brand Shoppers Stop began when the baseline of the brand logo changed with ever-rising customer aspirations.
From the 'Ultimate Shopping Experience' in 1992
'Feel the experience while you shop' in 1993,• 'Shopping. And
beyond.' in 2005,
From enjoying the international shopping experience to shopping for emotional fulfillments for example, buying a diamond ring for your loved one to express your love or flaunting your status.
This changed to 'Start Something New' in 2008 as a part of the Brand's Makeover strategy, but still connecting to the current mindset of customers to constantly upgrade and experiment.
PRICINGShopper’s stop follows premium pricing strategy that is offering high quality products at high price.
Source: http://corporate.shoppersstop.com/
RETAIL STRATEGY
On an average stores 30000 pieces of different products.Merchandise sourced from 250 exporters in Delhi, Mumbai, BangaloreCentralized buying for all products except cosmetics and perfumes to avoid sales taxCarries 63 days of stock.
Source: Shoppers Stop Investors presentation
59%
41%
2010-2011
ApparelsNon-Apparels
Diversified portfolio
2007-08 2008-09 2009-10 2010-11
61.20% 60.40% 59.50% 58.80%
38.80% 39.60% 40.50% 41.20%
Category Wise Sales(%)
Apparels Non-Apparels
REVENUE MIXCategory Wise Sales (%)
Non-Apparel Category includes Cosmetics, Personal Accessories, Jewellery, Leather goods, Home Ware, Electronics, Books and Music. These are all lifestyle products which have high aspiration value. An increase in sales of such products is an indication of an increasing consuming class.
65%
35%
2004-2005
ApparelsNon-Apparels
Source: Shoppers Stop investors presentation
REVENUE MIXDivision Wise Sales (%)
Non Apparels consist of Home, Leather, Watches, Jewellery, Electronics and Personal accessoriesChildren includes Mother Car
‘Mens’ has reduced by a significant percentage while there is a significant increase in non-apparel. Mr. Govind Shrikhande (MD, Shopper Stop) says that ladies are buying very highly in categories like beauty, ladies western wear, leather as well as home. Hence the company should more on attracting women.
31.0%
18.9%8.7%
41.3% MensLadiesChildrenNon-Apparel
2010-2011
38.0%
20.0%
7.0%
35.0%MensLadiesChildrenNon-Apparel
2004-2005
Source: Shoppers Stop investors presentation
MERCHANDISE MIXPrivate Label & Private Brand
2007-08 2008-09 2009-10 2010-1116%
16.5%17%
17.5%18%
18.5%19%
19.5%20%
20.5% 20.1% 19.9%
18.1%17.5%
Private Label Sales mix %
Private Lable Sales mix %
Shoppers stop repositioned and reinvented as a “Bridge to luxury” brand in year 2008 with unveiling of the new logo and tagline, “START SOMETHING NEW” and it started focusing on having more brands for fashionable families. Mr. Govind Shrikhande (MD, Shopper Stop) says, “To make that kind of the statement positioning, private label automatically has to come down because I am positioning my store for brand and the kind of brands that I am adding that is Mac, Clinique or Estee Lauders or any one of those like Tommy or Calvin Klein or French Connection, obviously these are going to take space as well as share of sales from something else, so there is no point in fighting anyone of these brands with a private label. So it is our conscious decision to reduce private label “. He says that it is related completely to the positioning. The positioning has an upside as far as long-term potential goes. Shoppers Stop’s focus on premium consumers places the company in a unique position as rising per capita incomes and an emerging middle class (currently a small part of the population) will help to increase store penetration and sales.Although private labels generate significantly higher margins compared to branded merchandise, SSL does not want to bear the associated high inventory and obsolescence risk. In FY10, private labels contributed 18% of Shoppers Stop’s revenues while international brands contributed over 50%. Hence going forward, SSL plans to maintain the share of private label close to 20%.
3.31% Decrease
Source: 1. Shoppers Stop Limited Quarterly Results Conference Call, February 01, 20102. http://www.fashionunited.in, News: Shoppers Stop to go easy on private labels, Tuesday, 21 September 20103. Live Mint, Shoppers Stop braces for expansion challenge, January 11,2011
• Jack & Jones, French Connection, CK Jeans, GAS, ESPRIT, Tommy Hilfiger, Mustang & Mango in apparel segment
• Loccitane, Lancome, MAC, Clinique & Estee Lauder in cosmetics
• CK, Armani & Gucci in sun glasses • Burberry, Nina Ricci, Diesel & Boss in watches
Improved Product Mix and Brands Profile to Attract “Aspirational” Customers
INTERNATIONAL BRANDS
PRIVATE LABELS
SHOPPERS STOP PRIVATE LABELS•Stop- Mens formal/casual/ethnic/womens western/ethnic, kids casual/ethnic•Kashish – Mens & womens ethnic•Life- Mens & womens Fashion•Vettorio Fratini- Premium formal& semi formal mens wear•Haute curry- fusion wear for women•Elliza Donatein- corporate womenswear•Ijeans wear- Mens denim
BRAND PORTFOLIO
APPARELS Arrow Louis Phillipie Park Avenue Parx Van Heusen Zodiac Stop Caliber Blackberries Scullers Givo Orly Lee Levice Pepe Killer Lee Cooper Wrangler Spykar Life Allen Solly Provouge Wills
Jewellery Facet Carbon Sparkles Tanishq FQ Swaroski Gili Oyzsterbay Sarvoski Estelle
Shoes Lee Cooper Red Tape Picasso Stop Life
Music Planet M Music WorldHome Décor Yamini Four Seasons Viva Welspun Borosil Corning Ware Pedrini Pyren
Hair Styling Habbibs
Books Crossword
Fragrances Christian Dior Ysl Davidoff Joop Diesel Lancaster Nicos Jil Sander Calvin Klein Boucheron Police J'del Pozo Myrurgia Etienne Aiger Xm
Sunglasses Ray Ban
Watches Casio Esprit Fossil Titan
Shoppers Stop
First Floor
Personal
CareAccessories
Second Floor
Women’s Wear
Third Floor
Men’s Wear
PHYSICAL CHARACTERISTICS OF THE STORE
Reason for such layout: Men are usually serious buyers and also mostly accompanied by a lady. So women’s section is kept before men’s, so as to attract them as they are impulse buyers. On the first floor the products kept are to attract the customer leading him/her into the store and also impulse buying.
Source: Shoppers Stop investors presentation
•Shoppers’ Stop is the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). The IGDS consists of 29 experienced retailers from all over the world, which include established stores like Selfridges (England), Karstadt (Germany), Shanghai No. 1 (China), Matahari (Indonesia), Takashimaya (Japan), C K Tang (Singapore), Manor (Switzerland) and Lamcy Plaza (Dubai). This membership is restricted to one member organization per country/region.
International
Affiliations
•The Organisation, in the year 2000, along with ICICI ventures also acquired the reputed bookstore, “Crossword”, which offers the widest range of books along with CD-ROM, music, stationery and toys. Services like Dial-a-book, Fax-a-book and Email-a-book enable customers to shop from their homes. Crossword currently has 18 Stores.
Acquisitions
INTERNATIONAL AFFILIATIONS & ACQUISITIONS
STORE SPACE RAMP-UP
Shoppers Stop is targeting higher growth by increasing the number of stores and hence the total gross floor area. Mr Govind Shrikhande (MD) says that increasing number of stores is strategic decision by SSL:1. Home category does not have many big players and hence taking a set ahead will help to
strengthen its position. 2. Increased number for stores actually came through once SSL has turned around the existing
format.3. All the stores that SSL has signed have been signed along with either the Shopper Stop being
anchor in the same mall or another anchor where either HyperCITY is the anchor or SSL believes very strongly in that particular mall.
11.7%Increase
FY05 FY06 FY07 FY08 FY09 FY10 FY110
500
1000
1500
2000
2500
752950
1171
16021822
20472287
Total Gross Floor Area (in '000s)
Year
Tota
l Gro
ss F
loor
Are
a
Source: Shoppers Stop Annual Report, 2010-11 Shoppers Stop Earnings Call
CUSTOMER ENTRY
2006-07 2007-08 2008-09 2009-10 2010-110
5
10
15
20
25
30
35
19.9
24.922.8 23.3
30.9
Year
Cust
omer
Ent
ry (i
n M
n.)
Customer entry is the number of people entering the store (footfall). In year 2008-09 there is a decrease in footfall due to mainly two reasons:1. Competition in catchment area: One of our biggest stores is Malad in Inorbit Mall and that is on the link road, but
biggest competition that has emerged is Oberoi Mall which is a five minute ride from Inorbit Mall and Inorbit Malls entry has dropped by more than 35% because of opening of Oberoi. The same thing has happened in Saket, Delhi versus Ansal Plaza. Shoppers Stop opened three more additional stores vis-à-vis Ansal Plaza, which is right there in the center. Hence the entry degrowth is due to cannibalization of customer entry by competition or by Shoppers Stop own stores.
2. Due to recession window shopping went down and only serious shoppers were coming in, so only the classical shoppers entering the store.
In 2010-2011 there is a good increase in customer entry because of new store openings in smaller cities like Aurangabad, Bhopal, Amritsar which drove it up by more than 50%.
32%Increase
Source: Shoppers Stop Annual Report 2010-11,Shopper's Stop Earnings Call – 2009,2011
CONVERSION RATIO
2006-07 2007-08 2008-09 2009-10 2010-1121%
22%
23%
24%
25%
26%
27%
28%
29%
27%
25%
28%
27%
24%
Year
Conv
ersi
on R
atio(
%)
Conversion ratio is the number of transactions versus the total customer entry into the store.During recession (2008) there was an increase in conversion ratio as the customerentry into the store reduced and only serious shoppers were coming in, so only the classical shoppers entering the store more and more and shopping more and more.In 2010-11 there is a decrease in conversion ratio due to heavy increase in customer entry. This is due to entry of Shoppers stop into new cities where it entered for the first time. When a brand like Shopper Stop enters a small city for the first time, there is always a lot of aura around it and so lot of people want to come and see it and that is why the conversion has degrown slightly.
3%Decrease
Source: Shoppers Stop Annual Report 2010-11, Shoppers Stop Earnings Call
SALES
2006-07 2007-08 2008-09 2009-10 2010-117400
7600
7800
8000
8200
8400
8600
8800
7973
8671
8218
7955
8518
SALES PER SQUARE FEET (in Rs.)
Year
Sale
s pe
r sq
uare
feet
(in R
s.)
2006-07 2007-08 2008-09 2009-10 2010-110
5
10
15
20
25
21
14
1
4
17
Year
Sale
s(lik
e-to
-lik
e gr
owth
%)
Gross sales both at chain level and for like-to-like stores showed an improvementas compared to last year. The growth in gross retail turnover of Shoppers Stop departmental store business is 23%.Post recession (2008) there was a significant decrease in customer entry and sales and hence sales per square feet. In 2009-10 although there was a marginal increase in sales but due to addition of significant number of new stores, the sales per square feet remained low.While in 2010-11 also opening of new stores continued and hence the customer entry but there was a significant rise in sales as well which resulted in increasing sales per square feet.
SALES (LIKE-TO-LIKE GROWTH %) (DEPARTMENTAL STORES)
7%
Source: Shoppers Stop Annual Report, 2010-11 Shoppers Stop Earnings Call
AVERAGE SELLING PRICE (ASP)
2006-07 2007-08 2008-09 2009-10 2010-11600
650
700
750
800
850
900
950
1000
704
759
821856
913
ASP (Like-to-Like)Departmental Stores
Year
Ave
rage
Sel
ling
Pric
e (R
s.)
Average Selling Price is the Gross Retail Sales divided by the number of units sold.Tracking ASP helps the retailer to align the offerings as per the customer segment as well as improve productivity of floor space
6.6%Increase
As the cotton prices had increased in year 2010-11, apparel prices went up and so the ASP.High price increase also directly impacted volumes to some extent.
Source: Shoppers Stop Annual Report 2010-11, Shoppers Stop Earnings Call
TRANSACTION SIZE
2006-07 2007-08 2008-09 2009-10 2010-110
500
1000
1500
2000
2500
15621713
18432029
2207
Transaction size (Rs.)Departmental Store
Year
Tran
sacti
on S
ize
(Rs.
)
Transaction Size= Total Sales/Number of cash memosTransaction size represents the amount spent be each customer on his buying.There is a close to 9% increase in transaction size in year 2010-11 over last year.Increased transaction size indicates an increased ticket size for the company.
9%Increase
Source: Shoppers Stop Annual Report 2010-11 ,Shoppers Stop Earnings Call
LOYALTY PROGRAM
• The First CitizenShoppers’ Stop’s customer loyalty program is called The First Citizen. The program offers its members an opportunity to collect points and avail of innumerable special benefits. Currently, Shoppers’ Stop has a database of over 2.5 lakh members who contribute to nearly 75% of the total sales of Shoppers’ Stop.
Source: Shoppers Stop Annual Report 2010-11
LOYALTY PROGRAM
FY08 FY09 FY10 FY110
500
1000
1500
2000
2500
10131277
1611
2017
First Citizen Members (in '000)
FY08 FY09 FY10 FY1160%
62%
64%
66%
68%
70%
72%
74%
76%
65%
72%
75%
73%
First Citizen Contribution to Total Sales %
Despite a 25% increase in First Citizen members over last year, their contribution to total sales has reduced by 2%. This means that the company need to relook at the efficiency of its loyalty program.
25%
2%
Source: Shoppers Stop Annual Report 2010-11
CUSTOMER SATISFICATION INDEX (CSI)
Jan-06 Aug-06 Nov-07 Feb-09 Apr-1050
55
60
65
70
75
80
85
6063 63
81 80
CSI
Customer satisfaction index is calculated based on the following parameters:Merchandising Range and QualityStore EnvironmentStaffTransaction EfficiencyLoyalty ProgrammeSchemesPromotionsCustomer experience in Shoppers Stop wrt the competitor stores
There was a significant increase in customer satisfaction from year 2007 to year 2009, although there is a small decrease in customer satisfaction in year 2010 from year 2009. This may be due to increased choices offered to the customers by other stores and hence increasing expectations of the customer
Source: Shoppers Stop Annual Report 2010-11
PRODUCTIVITY/OPERATING EFFICIENCY
2006-07 2007-08 2008-09 2009-10 2010-1101234567
2.753.62 3.29
5.56.03
GMROI (Gross Margin Return on Inventory)
Year
GM
ROI (
Rs. I
nven
tory
)
2006-07 2007-08 2008-09 2009-10 2010-112300
2500
27002520
2735
24712608
2771
GMROF(Gross Margin Return on Floor space)
Year
GM
ROF
(Rs.
per
uni
t of
reta
il sp
ace)
2006-07 2007-08 2008-09 2009-10 2010-110
200,000400,000600,000800,000
1,000,0001,200,0001,400,0001,600,0001,800,0002,000,000
1,032,6091,198,593 1,270,014
1,649,991 1,719,600
GMROL(Gross Margin Return on Labor)
Year
GM
ROL
(Rs.
per
em
ploy
ee)
9.6%
4%
4.2%
The reduction in inventory per sq. ft. has resulted in improved gross margin return on inventory investment (GMROI) for the company, which increased to 6.03% in FY10 (from 2.75% in FY06). The company has also benefited from the continued use of the concessionaire model helping it to reduce employees on its payroll. Consequently, SSL’s gross margin return on labour (GMROL) has increased from 1032609/employee inFY06 to 1719600/employee in FY10.
In last two years GMROF, GMROI, and GMROL all three are slightly down because of the addition of new store space. But on a comparable like-to-like, all three have shown a very positive trend.In year of recession (2008) there was a decline in GMROF because of reduced purchase by the customer. However the new positioning of bridge to luxury in year 2008 increased the average cash per customer and therefore, increased the average GMROF
Source: Shoppers Stop Annual Report 2010-11, Shoppers Stop Earnings Call
SWOT ANALYSIS
SWOT
• 4 warehouses, covering more than 3,50,000 sq. ft covering more than 4,00,000 SKU’s working 24*7• 2 million Loyalty Card holders, First Citizen, largest in any format.• Endeavor to make Shopping Experience the differentiator.
Strengths Weakness• Pressure of increasing leasing rentals of Malls.• Slowing expansion due to dependence on real estate developer for completing projects during slowdown.
Threat• Economic slowdown affecting the purchasing power of target consumer.• Rivalry amongst the established players and threat of new entrants as well.
Opportunities• Preferred partner for international brands in various categories due to diversified presence.• Expansion in different formats and varied locations across India.
COMPETITOR ANALYSIS
2008 2009 2010
Shoppers Stop -15.37 -32.47 -31.68
Pantaloon 43.51 62.88 85.12
Trent Westside 108.97 126 166.59
-25
25
75
125
175
225
WORKING CAPITAL CYCLE
Figu
res
in D
ays
Negative capital of SSL shows that the company is able to pay its creditors in advance
Source: Shoppers Stop Annul report , http://www.indiaretailing.com/
2008 2009 2010
Shoppers Stop 11.2 80.99 97.77
Pantaloon -512.7 -278.94 -288.62
Trent Westside 32.75 -56.73 -7.7
-550
-450
-350
-250
-150
-50
50
150
CASH FLOW FROM OPERATIONSFi
gure
s in
Rs.
Cro
res
Net Cash Flows from operating activities (indirect method); annual consolidated
COMPETITOR ANALYSIS
Source: Shoppers Stop Annul report, http://www.indiaretailing.com/
NOTE: Pantaloons retail follows a July-June year
Shoppers Stop Lifestyle Pantaloon Trent Westside
2007-08 1190 810 5840 755
2008-09 1383 960 7669 850
2009-10 1547 1286 9787 1120
1000
3000
5000
7000
9000
11000
NET SALES
Figu
res
in R
s. C
rore
s
COMPETITOR ANALYSIS
Source: Shoppers Stop Annul report , http://www.indiaretailing.com/
Then SSL was badly hit by global recession in 2008-09 when the buyer sentiment dipped, and, it posted losses of Rs 65 crores. Consumers downgraded purchases, which affected SSL’s profits more than its rivals’ who catered mostly to comparatively lower-income groups.The operating costs of SSL fell from Rs 400 per sq. ft. in 2008 to Rs 100 per sq. ft. in 2010-11. The company has since reworked the business model. It has control over its working capital expenses and is low on debt.
IMPACT OF 2008 RECESSION
SSL earlier worked on the buy-out model of sourcing — merchandise was bought from brand owners at factory price and SSL solely managed the inventory. This meant that it was stuck with unwanted stock and incurred huge inventory costs when sales fell — also a big reason behind recession taking such a toll on SSL
the buy-out model of sourcing
Till 2008
In 2009, SSL introduced the consignment model, where vendors manage inventory, while SSL picks up only those items that sell in the store. Nearly 80 per cent of the revenues now come from the consignment model.
the consignment model of sourcing
2009 Onwards
Source: http://www.indiaretailing.com/
ADDRESS Hypercity Retail (India) Ltd.Paradigm, A-Wing, 1st Floor, Mindspace,Malad Link Road, Malad (West), Mumbai 400064.
INDUSTRY RetailSSL Stake 51%STATUS OperatingNUMBERS OF STORES 10SALES FOR 6 MONTHS(as of Sep 2011)
Rs. 369 cr
SALES FOR FULL YEAR (as of March 2011)
Rs 597 cr
GFA 10.64 Lakh sq. ft.OWNED In 2006
HyperCITY: AN OVERVIEW
Source: Shoppers Stop Investors Presentation
About HyperCITYHypercity Retail (India) Ltd. is part of the K. Raheja Corp. Group, a leader inthe Indian retail sector
HyperCITY provides a truly international shopping experience, where customers can shop in comfort in a large, modern, & exciting environment. It offers a wide and contemporary range of innovative products, sourced from both local and international markets.
The product range covers: Foods, Homeware, Home Entertainment, Hi-Tech, Appliances, Furniture, Sports, Toys & Fashion.
KEY TEAM- HyperCITY
Mr. Mark Ashman Chief Executive Officer Veneeth Purushotaman
Business Head - Technology
Ashutosh Chakradeo Head - Buying & Merchandising
Simon Hooper Chief of Operations
Aparna Ranadive Business Head - HR
HyperCITY: AN OVERVIEW
Source: Shoppers Stop Investors Presentation
VISION
To be an integral part of customer
lives, by offering them a high quality
shopping experience
through great
products at ever better
prices.
Tagline: “Big store. Big savings.”
Source: Shoppers Stop Investors Presentation
Total Retail space 10.7 lacs sq. ft. with 10 stores operating in 7 cities (No data available on the 2 stores opened recently in the month of Dec’11)
2007 2008 2009 2010 2011 2012E 2013E 2014E
1 1
3
7
9
12
15
18
Number of Stores
Cluster based growth strategy, with Core and Mid sized stores►Core size to be in 75–85 K sq. ft. to drive assortment, differentiation and profitability►Mid size format of 50-55 K sq. ft. for penetration
HyperCITY: AN OVERVIEW
Source: Shoppers Stop Investors Presentation
Department Mix % Key Driver
Food & Groceries 58-62% Footfall driver
General Merchandise[Home, Furniture, CDIT]
30-34 % Value & Margin driver
Apparels & Jewellery 7-9% Fashion, Value & Margin Driver
Food General Merchandise
Fashion
A strong own brand portfolio
HyperCITY: AN OVERVIEW
Branded79%
Private label21%
Business Model
Source: Shoppers Stop Investors Presentation
Target customers: 18-45 years with Income -20,000+ & Discerning, Urban, Upscale with High Disposable Income
Other In-store attractions –Café, Laundry, Wine, Saloon, SPA
Widest product range on offer in a hypermarket in India, 50K SKUs
Awarded the “100 Must Visit Retail Destinations for year 2007-08 around the world”
International Award for “ Corporate Achievement to Recognize Quality & Excellence”–April 2010.
Positioning Product Offering
Average footfalls per month: 1.3 Mn, indicating strong customer pull
Large Footfalls attracted Due to the Widest Product Offering by HyperCity in India
HyperCITY: POSITIONING & PRODUCT STRATEGY
Supply Chain and Systems Back end operations and IT Best Practices and Policy
Operates multi channel supply chain for various product categories
Imports account for 20 % of General Merchandise
All DC operations on Wireless mobile devices
Furniture and CDIT products are home delivered
Reliable Inventory –Merchandize Management System
Dynamic Auto-replenishment system, enabling consistent high availability of stocks
E-Payment for 98% transactions
Majority of product written off on completion of 12 months
Quarterly cycle , enabling reliable inventory and Shrinkage monitoring
Performance Linked Reward Scheme & ESOP
With support from best in class partners
HyperCITY: BACK END OPERATIONS
Best in Class Back End Operations to Support Vibrant Front End
Source: Shoppers Stop Investors Presentation
HyperCity has 62 per cent of its sales revenue coming from food and grocery and 8 per cent from apparels
Among apparels and accessories, HyperCity’s stocks are mainly private label products & also introduced some brands like Gini and Jony, Puma and Lotto in HyperCity.
At present, HyperCity stores are 80,000 to 120,000 sq. ft. in size and the new ones will be between 50,000 and 70,000 sq. ft. This will save on the rentals.
HyperCITY: STORE STRATEGY
Source: Shoppers Stop Investors Presentation
As a place and space for people who seek information, knowledge or just the pleasure of reading
Established on 15th October 1992
2000: Shoppers Stop acquired Crossword
2005: Crossword became wholly owned subsidiary of Crossword
Crossword, with Eighty three stores, across Ahmedabad, Aurangabad, Amritsar, Bhopal, Bengalooru, Chennai, Delhi, Durgapur, Hyderabad, Indore, Jaipur, Kolkata, Kota, Lucknow, Mumbai, Nagpur, Nasik, Navi Mumbai, Pune, Thane, Udaipur, Vadodara, Vapi & Vijaywada spread across the gross floor area of nearly 2.52 lacs sq ft
COMPANY INFORMATION
• Works on Franchisee model
• Primarily by Self Service
• Customers can browse all they want without making a purchase
• Help is available when needed.
• Crossword strives to serve all age groups.
• Payment through cash and credit card presented at billing counter.
• No Credit Sales
STORE OPERATIONS
FictionNon-FictionManagementComputerAutobiographiesMagazinesHealthHobbies
Books Kids DVDs Stationery
ToysBoard GamesCard GamesComicsBooks
MoviesMusicGames
DiariesNotebooksPensPencilsTable Items
CATEGORIES & ASSORTMENT
Thank You
top related