Spencers Retail Ltd Management Discussions

(Annexure ‘A to the Boards Report)

Redefining the Shopping Experience

Shopping used to be a chore—crowded markets, endless queues, and multiple stops just to check off a shopping list. Then Spencers Retail Limited (also referred to as ‘Spencers, ‘We or ‘the Company) came along and changed everything. In 2000, it transformed Indian retail by opening the countrys first hypermarket in

Hyderabad, proving that buying essentials did not have to mean running from one shop to another.

Today, as a proud part of the RP-Sanjiv Goenka Group, the Company operates with a renewed focus across its core geographies of West Bengal and Uttar Pradesh. As of March 31, 2025, it had a total of 121 stores, comprising Spencers (89 Stores) in 18 cities and Natures Basket (32 Stores) in 7 cities, with a combined trading area of 8.91 Lakhs Sq. Ft. (Spencers: 7.67 Lakhs Sq. Ft.; Natures Basket: 1.24 Lakhs Sq. Ft.).

Our business delivered encouraging performance in high-potential markets, especially across Eastern India and Uttar Pradesh, where

Spencers continues to benefit from market strongbrand insight, and customer loyalty. These regions consistently led in footfall, store productivity, and revenue per square foot, reinforcing our confidence in their long-term value potential.

In line with this conviction, the Company has consolidated its geographic focus, ensuring that resources and investments are channelled towards the markets that matter most. This realignment has resulted in a leaner, more agile network and significantly improved cost efficiencies across store and corporate levels — making us structurally stronger and strategically sharper.

With the groundwork now laid, Spencers is primed to capture the next wave of growth. Our roadmap is anchored in consumer-centric innovation, operational excellence, and capital efficiency. Whether through digital expansion, curated assortments, or sharper regional strategies, we are building a resilient and scalable business ready to unlock sustained, profitable growth in the years ahead.

More than just a place to shop, Spencers transforms everyday moments into little luxuries. Whether its picking up a handcrafted pastry, discovering gourmet flavours, or selecting the perfect bottle of wine, every aisle offers a chance to indulge. Natures Basket Limited (‘Natures Basket or ‘NBL), a wholly owned subsidiary of the Company elevates this experience further, curating global delicacies and health-focussed choices that make fine living feel effortless and within reach.

Retail is evolving, and Spencers is keeping pace. Through Omnipresent Retail India Private Limited (ORIPL), its dedicated e-commerce subsidiary, the brand seamlessly blends digital convenience with the trust of a neighbourhood store. Whether its fresh groceries, daily essentials, stylish apparel, or even liquor, this omnichannel platform ensures that everything one needs is just a tap away. Enhancing this proposition further, the Company launched its quick commerce app, JIFFY, under the tagline ‘Joh Bhi Chaho Jhat Se Pao. Designed to deliver essentials within 30 minutes, JIFFY is redefining instant shopping experiences while staying true to Spencers promise of reliability, quality, and neighbourhood familiarity.

At its core, Spencers believes shopping should be more than just ticking items off a list. By prioritising quality, fresh ideas, and customer delight, it creates an experience that is smooth, enjoyable, and always worth coming back for.

Global Economic Overview

In 2024, the global economy expanded by 3.3%, supported by moderate recovery in consumption and trade. However, 2025 has introduced renewed volatility as major economies adjust their policy priorities amidst heightened geopolitical tensions and persistent structural challenges. A pivotal development occurred in April 2025, when the United States imposed universal tariffs, triggering retaliatory actions from several trading partners. This sharp policy shift disrupted global supply chains, led to equity market corrections, and exerted upward pressure on interest rates and bond yields.

Against this backdrop, global GDP growth is projected to slow to 2.8% in 2025, before recovering slightly to 3.0% in 2026. Inflation remains higher than initially expected, driven by rising import costs, supply chain bottlenecks, and elevated service prices. Headline inflation is forecast at 4.3% for 2025, while core inflation continues to remain elevated, particularly in advanced economies.

The United States is projected to grow at 1.8% in 2025, as cost-of-living pressures and slower consumption dampen growth momentum. In China, growth is expected to moderate to 4.0%, affected by property sector weaknesses and subdued household demand. The Euro Zone remains under stress due to energy insecurity and fragmented fiscal policies, with growth forecast at just 0.8%.

Emerging markets and developing economies are forecast to grow at 3.7% in 2025, compared to 4.3% in the previous year. Currency depreciation, high public debt, and restricted access to affordable capital are affecting retail trade and import-reliant sectors in several countries. For customer focussed businesses, including organised retail, the combination of tighter discretionary spending, shifting consumption patterns, and supply-side cost pressures presents a complex operating environment.

In parallel, long-term structural factors are influencing global growth prospects. Ageing populations are expected to reduce global output by 1.1% points annually through to 2050. However, the effects may be partially offset by healthier working-age populations and rising female participation. Migration is also a growing driver of demographic and consumption shifts. Over 304 million individuals or 3.7% of the worlds population, are currently migrants or refugees, with a large share hosted in emerging economies. When effectively integrated, migration can expand consumer markets and support retail demand.

Outlook

For the retail sector, the global economic environment presents a blend of risks and opportunities.

Elevated inflation, trade frictions, and consumer caution may limit near-term growth. However, evolving consumption behaviours, increasing digital penetration, and demand for convenience, value, and experience-driven retail models continue to create space for innovation and differentiation. At Spencers, our omnichannel strategy, curated product mix, and regional focus position us well to adapt to global headwinds and tap into emerging consumption trends.

Indian Economic Overview

The Indian economy displayed remarkable resilience in 2024-25, achieving an estimated real GDP growth of 6.5%. This expansion was primarily driven by robust private consumption and increased investment activity. Private Final Consumption Expenditure (PFCE) grew by 7.3%, supported by a revival in rural demand, which was bolstered by favourable monsoons and higher agricultural output. However, growth in Gross Fixed Capital Formation (GFCF) moderated to 6.4%, largely due to election-related uncertainties and a more cautious approach to private sector investments.

The agricultural sector expanded by 3.8% in 2024-25, benefitting from favourable weather conditions and a substantial increase in food grain production. This contributed to higher rural incomes and helped stabilise food prices. Industrial growth remained moderate at 6.2%, weighed down by sluggish global demand and seasonal disruptions. However, core industries such as steel and cement provided a degree of stability. The services sector, a key pillar of Indias economic expansion, grew by 7.2%, with finance, real estate, and professional services playing a crucial role in job creation and fuelling investments in the housing market.

The retail industry, a significant driver of domestic consumption, continued to witness strong growth, buoyed by rising disposable incomes, urbanisation, and digital adoption.

While inflationary pressures and supply chain challenges posed hurdles, retailers that embraced omnichannel strategies, operational efficiencies, and evolving consumer preferences remained well-positioned for sustained success in the evolving economic landscape.

( Sources: KPMG India Union Budget 2025-26, Economic Survey of India 2024-25)

Indias Growth Story is Expected to Remain Robust in the Next Decade

Indias economic expansion is expected to continue its strong momentum over the next decade, with GDP growth projected to remain among the highest globally. The Indian retail market is set to more than double from 82 Trillion in 2024 to over 190 Trillion by 2034, driven by rising income levels, urbanisation, and increased consumer spending. As India moves up in the global GDP rankings, its consumption growth is outpacing other major economies, making it a key market for retail investment and expansion.

Indias Consumption Growth Outpaces Other Economies

Indias private consumption has consistently outpaced that of other global economic giants such as China, the United States, Japan, and Germany. Forecasted to expand at a CAGR of 9% from 2024 to 2034, India is set to emerge as the global leader in household expenditure growth, driven by a rising affluent middle class and a growing consumer demographic. This increase in consumption is not merely a statistic; it is the force driving the rapid expansion and strength of the retail sector.

Indias Consumption Growth Trajectory (Barring Covid Disruptions)

Following a brief hiatus during the Covid-19 pandemic in 2020, Indias consumption growth has demonstrated a resurgence.

The country has maintained double-digit consumption growth for most years, reflecting its solid and reliable demand patterns.

The upward trajectory of discretionary spending, coupled with a shift towards lifestyle-oriented consumption, presents a promising future for retail businesses catering to both affluent and value-seeking consumers.

Outlook

Indias GDP is anticipated to grow between 6.3% and 6.8% in 2025-26, fuelled by strong rural demand, strategic infrastructure projects, and a positive business sentiment across sectors. Nonetheless, challenges such as geopolitical risks, inflationary pressures on food prices, and a slow-paced recovery in private sector investments could act as dampeners on growth. Although the financial services sector will likely remain a dominant driver of growth, the consumer goods and manufacturing sectors may struggle with global demand uncertainties and lingering supply chain disruptions.

Rising disposable incomes, urbanisation, and digital penetration continue to act as the primary catalysts for the expansion of organised retail in India. Trends such as quick-commerce, omnichannel retailing, and premiumisation are setting the stage for the sectors next wave of growth. In spite of external uncertainties, supportive policy frameworks, increased foreign investment, and the evolving nature of consumer preferences will sustain the momentum, ensuring India retains its position as one of the fastest-growing retail markets globally.

Spencers Perspective

Indias steadfast economic expansion provides an incredibly promising landscape for the retail industry, and Spencers is poised to capitalise on it. We are seeing a powerful resurgence in rural demand, a significant rise in disposable incomes, and an accelerated, nationwide shift towards digital and omnichannel retailing. These are all strong avenues for substantial growth.

As the Indian market continues its vigorous expansion, Spencers will strategically concentrate on regional consolidation, relentlessly pursuing operational efficiency, and dramatically accelerating our e-commerce presence. This focussed approach will drive our sustainable profitability. By effectively leveraging Indias burgeoning consumption power and deeply understanding its evolving consumer preferences, we aim to significantly strengthen our market presence and profoundly deepen customer engagement.

Indian Retail Industry Overview

Retail in India Has Grown in Line with Consumption

The Indian retail market has expanded significantly over the past decade, keeping pace with overall consumption growth. The sectors strong performance is fuelled by multiple factors, including increasing digital penetration, evolving consumer preferences, and regulatory support for retail investments. The organised retail segment, in particular, has experienced rapid growth, leading to greater efficiencies and enhanced customer experiences.

Enhanced Discretionary Spending:Lifestyle and indulgence categories have grown by 10%+.

Organised Retail Has Outpaced Category Growth Consistently

The organised retail sector, encompassing large-scale brick-and-mortar chains and thriving e-commerce platforms, has outpaced broader category growth with significant consistency. Retailers that prioritise operational efficiency, scalability, and seamless customer experiences have gained substantial market share. Although the Covid-19 pandemic briefly slowed momentum, the sector has rebounded with vigour, strengthening its trajectory of sustained high-performance growth.

Consumer Confidence and Expectations Trending Positively

When people feel secure about their finances, they shop with purpose and excitement. The Future Expectation Index (FEI) is proof of this positive outlook, showing that people are ready to invest in themselves, their homes, and their lifestyles. For retailers, this is the moment to tap into a consumer base thats eager, engaged, and open to new possibilities.

Retail Growth Momentum Expected to Continue

Indias retail sector is set to grow steadily at nearly 9% annually over the next decade, driven by rising incomes, increasing digital adoption, and the expansion of organised retail. Businesses that adapt to these shifts by focussing on efficiency, technology, and evolving consumer preferences will be well-positioned for long-term success.

Demographic & Consumer Behaviour: Key Shifts

What Many See of India...

Indias retail sector has historically been shaped by a growing middle class, a predominantly male workforce, and consumer demand led by Millennials and Gen Z. These demographics continue to be key drivers of market trends, with rising disposable incomes and increasing digital adoption fuelling demand across various categories.

What India Also Is...

The Indian consumer is no longer a monolith. Rising prosperity across economic classes, a fast-growing 45+ shopper demographic, and an increase in female workforce participation are redefining the rules of retail. For retailers, this presents an unparalleled opportunity to engage with a wider, more diverse, and increasingly discerning customer base.

Income: Premium & Mass Market Opportunities

As household incomes rise, more people are willing to splurge on premium products, but that does not mean value-conscious shopping is going anywhere. With the number of households expected to grow from 325 Million in 2024 to 407 Million by 2034, retailers have a unique challenge—offering the right mix of affordability and aspiration to meet the evolving needs of shoppers who want both quality and value.

Age and Generation: Growth in 45+ and Gen Z Segments

Indias demographic structure is undergoing a notable shift, with significant growth projected in the

45+ age group alongside a sizable Gen Z population. The total population expected to rise from 1,450.9 Million in 2024 to 1,568.7 Million by 2034, expanding at a modest CAGR of 0.8%. The median age will rise from 29 years to 33 years, reflecting an aging yet still relatively young workforce. The aging population presents opportunities in categories such as healthcare, wellness, and premium lifestyle products, whereas Gen Z, with its digital-native behaviour and preference for trendy, sustainable, and global brands, is driving a new wave of consumption patterns. Retailers must tailor their strategies to cater to both these segments, ensuring relevance across generations through personalised marketing, product innovation, and omnichannel engagement.

Gender: Education and Workforce Participation Driving Higher Spending

With rising educational attainment and increased participation in the workforce, women are becoming a key driver of retail demand. Greater financial independence and exposure to global influences are reshaping consumer behaviour, particularly in categories such as fashion, personal care, wellness, and financial products. This shift calls for a more inclusive approach from retailers one that reflects the evolving preferences and aspirations of modern women.

Curated assortments, tailored experiences, and purposeful communication will be essential to engaging this growing and influential consumer segment.

Regional Disparities in Demographics and Retail Opportunities

Indias retail growth is far from monolithic, with substantial regional divides in urbanisation, literacy, per capita GDP, and consumer preferences. The disparity in state GDP per capita is striking, ranging from 66,000 to 7 Lakhs, with the countrys average pegged at 2.1 Lakhs. This uneven economic development presents both challenges and opportunities for the retail sector.

India Differs across Demographic Metrics

Metric	Minimum Value	Maximum Value	Average/Range
Median Age (Years)	22	35.1	-
Womens Workforce	9.9	63.8	31.7
Participation (%)

Retail success in India hinges on understanding regional diversity. The Southern and Western regions, with their well-developed urban centres, higher literacy levels, and stronger purchasing power, create favourable conditions for premium and tech-driven retail experiences. Conversely, the populous Northern and Eastern markets require an adaptive approach, given their younger demographic and lower literacy rates.

For retailers, this means fine-tuning their offerings, selecting strategic store locations, and deploying targeted marketing efforts to ensure deeper market engagement and long-term profitability.

How Well Do We Know the Indian Consumer Preferences?

Balancing Premiumisation and Value Consciousness

Indian consumers demonstrate a bifocal preference: many are inclined to pay a premium for exceptional quality and distinctiveness, yet, at the same time, the need for value-for-money continues to be a decisive factor in their buying behaviour.

Although premiumisation is steadily on the rise, value-consciousness remains firmly embedded in the

-25 psyche of Indian consumers. The number of taxpayers reporting earnings over 1 Crore has skyrocketed, from just 44,000 in 2013-2014 to a staggering 2,30,000 in 2023-2024, signalling an expansion of the affluent market. Nonetheless, value-for-money considerations continue to hold considerable sway, with shoppers focussing on both price and product functionality when making decisions.

Consumers Ranking Pricing and Features Among the Top 3 Purchase Drivers (%)

Consumer Income Group	Price Sensitivity	Feature Preference
Low Income	51	41
Middle Income	39	41
High Income	37	40

Source: Income Tax Department Income Tax Return Statistics for respective Assessment Years,

BCG CCI Analysis

This highlights that, despite the rise of premium offerings linked to increased affluence, the consideration of affordability continues to dominate purchasing decisions across all economic strata.

Digital Surge Amidst Strong Offline Purchase Trends

Indias retail evolution is a blend of the old and the new. While digital transactions have increased from 23 Billion in 2019 to 164 Billion in 2024 and online shopping has grown from niche to mainstream, traditional stores continue to thrive. More than half of all purchases still happen exclusively in brick-and-mortar outlets, proving that the in-store experience is far from obsolete. Many shoppers now combine both worlds—exploring products online before making a final decision in-store, or browsing shelves before completing a purchase digitally—making a seamless omnichannel experience the key to future retail success.

More Global Exposure and Preference for Indian Products

International brands have become more available due to globalisation, yet Indian consumers largely remain inclined towards locally sourced products in key categories.

49% of Indians identify as global citizens, embracing international trends.

51% believe globalisation has positively impacted their lives.

70% prefer locally produced food, emphasising trust in domestic supply chains.

45% choose Indian brands for personal care and clothing, showcasing strong local brand loyalty.

26% feel that imported products are not well-suited to local preferences, underscoring the importance of regional adaptation for global brands.

Over 600 homegrown Direct-to-Consumer (DTC) brands have emerged since 2016, catering to unmet consumer needs with locally tailored offerings.

Huge Opportunity for Retail players

Indias retail market holds immense potential, but long-term success will require a data-led and agile approach. With the sector expected to grow to 190 trillion by 2034, retailers must look beyond scale and focus on precision understanding consumer preferences, streamlining operations, and embracing technology. AI, big data, and digital platforms will play a vital role in enabling personalisation and improving the overall shopping experience.

Equally important is regional relevance. Tailoring products, pricing, and engagement strategies to local cultures and needs will ensure greater consumer connection and brand loyalty. By drawing on real-time insights and adapting to evolving behaviours, retailers can strengthen their competitive position in a fast-changing market.

Spencers Perspective

At Spencers, we are actively strengthening our operations through a series of focussed strategic initiatives. Our emphasis is clear: efficiency, expansive digital reach, and robust regional growth.

We have been hard at work optimising our store network. This means we have made the strategic decision to close non-performing outlets, allowing us to channel resources into enhancing our high-potential locations.

Our e-commerce platform continues its impressive ascent, growing by 20% year-over-year. Furthermore, our Jiffy quick-commerce service is rapidly gaining traction in key urban markets, demonstrating our commitment to meeting evolving consumer demands.

Regional growth remains a significant priority for us at Spencers, with East India and Uttar Pradesh notably driving a 3.7% increase in performance.Weareactivelyrefining our product mix, enhancing supply chain efficiencies, and investing in superior customer experiences to improve our competitiveness.

Looking ahead, Spencers is sharply focussed on expanding our omnichannel presence, leveraging digital innovations, and strengthening our core retail operations. With a strategic approach to profitability and market adaptability, we are well-poised to navigate any challenges and capitalise on Indias dynamic and evolving retail landscape.

Opportunities and Challenges in the Indian Retail Market

Opportunities

E-commerce and Omnichannel

1 Expansion

Indias e-commerce market is booming like never before, with digital payments, affordable smartphones, and broader internet access playing a starring role in this transformation. Whats even more exciting is how shoppers are blending their online and offline experiences, craving a seamless journey that combines the best of both worlds. In fact, 60-65% of Indian consumers now want to shop with ease, whether they are browsing at home or in-store. Through its omnichannel subsidiary ORIPL and the newly launched quick-delivery platform ‘JIFFY Spencers is creating a hyperlocal digital ecosystem that brings products to consumers doorsteps while retaining the familiarity and trust of neighbourhood retail. With curated assortments, intuitive interfaces, and high search-to-cart conversion, Spencers is empowering modern shoppers with convenience, speed, and choice.

2 Growth in Tier 2 and Tier 3 Cities

As 60% of Indias retail growth is expected to emanate from its smaller cities, brands are increasingly tailoring their strategies to these emerging markets. Enhanced infrastructure, rising aspirations, and greater disposable incomes are fuelling this growth, presenting a golden opportunity for expansion. To tap into this potential, companies are embracing product customisation, vernacular marketing, and building local partnerships, ensuring deeper connections with consumers and maximising returns.

Entry of Global Brands and D2C

3 Expansion

India continues to attract international brands, with over 300 global players already established in the market. More than 100 additional brands are expected to enter by 2025, enhancing the availability of premium products across categories such as fashion, cosmetics, and healthcare. Simultaneously, direct-to-consumer (D2C) brands are expanding, driven by personalisation, superior customer experience, and innovative product offerings. Many D2C brands are also venturing into physical retail, further fuelling market growth.

Technological Innovation and AI

4 Integration

Technology is revolutionising

Indian retail. Artificial Intelligence

(AI), Augmented Reality (AR), and data analytics are enhancing personalisation, customer engagement, and operational efficiency. AI-driven personalisation alone could boost retail revenues by 10–15% by 2025. Smart retail technologies like cashier-less stores, automated inventory management, and virtual try-ons are becoming mainstream, further improving the shopping experience.

Sustainability and Conscious

5 Consumption

A shift towards sustainability is evident, with 70% of Indian consumers considering sustainability a key factor in their purchase decisions. Brands that adopt eco-friendly practices, ethical sourcing, and carbon footprint reduction are likely to gain a competitive edge. Companies like Fabindia and Tatas Taneira have successfully built their brand identities around sustainability, reflecting changing consumer preferences.

Government Initiatives and

6 Policy Support

The Indian government has introduced several initiatives to support retail growth, including FDI relaxation in single-brand retail, Digital India, and Make in India. These policies are attracting US$ 15–20 Billion in investments by 2025, strengthening infrastructure and creating employment opportunities. The implementation of GST has also streamlined taxation, reducing costs and improving supply chain efficiencies.

Challenges

Rising Inflation and Economic

1 Uncertainty

The weight of inflation presses heavily on the shoulders of commerce, distorting the ebb and flow of consumer demand. With raw material prices increasing and supply chains tangled in disruption, retailers must walk a razor-thin tightrope—striving to sustain profits without pushing prices beyond the reach of an increasingly cautious market.

2 Supply Chain Disruptions and Geopolitical Volatility

Retails supply chains are under siege, with the apparel industry bearing the brunt of the storm. Geopolitical upheaval in major production strongholds like China and Bangladesh has thrown procurement into disarray, forcing retailers into a precarious battle for supply stability. To withstand the chaos, companies must strengthen their logistics networks, embracing cutting-edge technology and strong contingency strategies.

Intense Competition and

3 Changing Consumer Preferences

Indias retail ecosystem is ablaze with competition, where global giants, digital-native mavericks, and hyper-speed commerce platforms jostle for dominance. Todays discerning consumers seek more than mere transactions—they demand ease, exclusivity, and ethical responsibility. For retailers, the choice is stark: innovate, adapt, or be left behind in the dust.

4 The Struggle of Kirana Stores

Once the undisputed monarchs of Indian retail, kirana stores now find themselves in the crosshairs of quick commerce juggernauts, their reign slipping from 95% market dominance in 2018 to a predicted 88.9% by 2028. Yet, their greatest strength—intimate community bonds—can become their salvation, if only they accept the winds of change. By incorporating digital threads into their age-old networks and tapping into the Open Network for Digital Commerces (ONDC) transformative power, these retail bastions can reclaim their relevance in a landscape shifting beneath their feet.

5 Workforce and Talent Management

A dynamic retail ecosystem demands a workforce adept in both traditional operations and cutting-edge technology. However, talent shortages—especially in data-driven and automation-powered roles—pose a growing challenge. To sustain competitive agility, retailers must embed structured learning frameworks, equipping employees with the digital acumen required to navigate an increasingly tech-centric industry. https://texfash.com/column/retail-in-india-2025-a-promising-future-backed-by-insights-and-statistics

https://www.businessworld.in/article/indian-retail-industry-bracing-to-keep-ship-afloat-amid-troubled-waters-544188

Indian Organised Retail Market

The Indian organised retail market is on a strong growth trajectory as it moves into 2025, driven by evolving consumer preferences, rapid digital adoption, and a shift towards modern retail formats.

The sector continues to benefit from rising disposable incomes, urbanisation, and advancements in logistics and infrastructure, reinforcing its expansion across metropolitan areas as well as Tier 2 and Tier 3 cities.

As of 2024, Indias organised retail market was valued at approximately US$ 190 Billion and is projected to reach around US$ 230 Billion by 2030.

This growth reflects an increasing share of organised retail in the broader retail market, which is anticipated to expand to US$ 1.8 Trillion by 2029-30, with organised retail accounting for roughly 30% of the total market. The sectors expansion is being fuelled by a combination of regulatory support, digital transformation, and an evolving consumer base that prioritises quality, convenience, and brand engagement.

Key Growth Drivers

Rising Disposable Incomes

Higher income levels are boosting consumer spending, especially in non-metro cities, driving demand for organised retail.

Growing Urbanisation and Infrastructure

Expansion in Tier 2 and Tier 3 cities, coupled with improved logistics, is increasing retail penetration.

Increasing E-commerce and Omnichannel

Digital-first consumers are driving seamless online-offline retail integration, enhancing convenience and variety.

Emerging Brand Entries

Over 100 international brands are expanding market competition and consumer choices, particularly in premium and luxury segments.

Expanding D2C Presence

Digital-native brands are scaling up with physical stores, blending e-commerce with traditional retail formats.

Outlook

Indias organised retail sector is set to maintain strong growth in 2025, overcoming macroeconomic challenges such as inflation and supply chain constraints. Cutting-edge technologies, including AI-driven analytics, automation, and personalised consumer engagement, are transforming the retail space. The evolving preferences of a younger, digitally adept demographic are steering brands towards immersive shopping experiences, hyperlocal models, and premium product positioning.

With policy tailwinds and an influx of foreign investments, the sector is witnessing rapid consolidation and infrastructure advancements, fostering a modernised retail ecosystem. As companies refine their omnichannel strategies and embed digital capabilities, the market is primed for continued evolution, offering customers seamless access to diverse product assortments and elevated retail experiences.

https://www.cnbctv18.com/business/pwc-sees-organised-retail-reaching-30-of-indias-1-8-trillion-retail-market-by-fy30-19576548.htm

https://economictimes.indiatimes.com/industry/ services/retail/organised-retail-set-to-reach-

230-billion-by-2030-deloitte-rai-report/ articleshow/118603575.cms

Spencers Perspective

Spencers is a prominent player in Indias organised retail sector, offering a comprehensive range of products spanning Food and Grocery, Consumer Durables, Apparel, Furniture, and Footwear. While the Company holds a strong market position, modern trade in the grocery segment remains significantly underpenetrated highlighting a substantial growth opportunity. With extensive industry experience, a well-rounded product portfolio, and a deep understanding of consumer behaviour, Spencers is well-placed to tap into this potential.

Staying aligned with shifting retail dynamics, the Company continues to enhance store operations, grow its customer base, and expand strategically across key markets. Through a hybrid retail model that blends physical stores with a robust omnichannel presence, Spencers delivers greater convenience, accessibility, and a superior shopping experience to its customers.

Indian E-commerce Market

Indias e-commerce sector is on track for substantial growth in 2025, driven by deepening internet penetration, an expanding base of digital-first consumers, and continuous advancements in payment systems and logistics networks. Projected to scale between US$ 137 Billion and US$ 145 Billion by 2025—up from US$ 125 Billion in 2024—the industrys momentum is particularly pronounced in Tier 2 and Tier 3 cities, where digital shopping adoption is accelerating.

By 2025, India is expected to have over 900 Million internet users, yet online shopping penetration remains at around 40%, highlighting immense untapped potential. With a projected CAGR of 19%–21.5%, the sector is on course to reach US$ 363 Billion to US$ 400 Billion by 2030.

Key catalysts for this growth include the affordability of smartphones, data democratisation, and innovations in digital payments. Moreover, increasing sales in quick-commerce, apparel, and electronics are redefining consumer preferences. The yper-proliferation of D2C brands and the growing emphasis on omnichannel strategies signal a retail ecosystem that is evolving to meet the demands of modern shoppers.

Outlook

As Indias e-commerce sector moves into 2025, its growth trajectory remains strong, backed by sustained technological investments, AI-driven customer interactions, and government-led initiatives like ‘Digital India to enhance digital infrastructure. While industry leaders such as Amazon and Flipkart continue to shape the market, fresh entrants are driving innovation and intensifying competition. Businesses that prioritise customer-centric strategies, optimise supply chains, andrefine will stand out in this evolving digital landscape.

https://www.mordorintelligence.com/ industry-reports/india-ecommerce-market

https://www.business-standard.com/ industry/news/e-commerce-market-size-to-jump-over-4-times-to-550-bn-by-2035-report-125022000914_1.html

Spencers Perspective

Spencers has truly mastered the art of blending the old with the new, seamlessly merging our well-established physical stores with a cutting-edge e-commerce website and mobile app. Over the years, we have meticulously fine-tuned our digital game to offer customers a smooth and hassle-free shopping experience.

After gaining significant momentum during the pandemic, Spencers doubled down on strengthening our e-commerce arm, ORIPL, ensuring it reached more customers online than ever before. This strategic focus paid off. By the 2024-25 fiscal year, ORIPL had not only fine-tuned its operational efficiency but also turned profitable, recording an impressive Gross Merchandise Value (GMV) of 278 Crores.

Indian Quick-Commerce Market

Indias quick-commerce sector is witnessing strong growth, driven by changing consumer expectations, rapid urbanisation, and advancements in logistics and supply chain management. With delivery times now as short as 10 to 30 minutes, this model is reshaping how consumers purchase groceries, essentials, and even discretionary goods.

Indias quick-commerce sector is on a steep growth trajectory, set to scale between US$ 5.5 Billion and US$ 6 Billion by 2025, with a CAGR surpassing 40%. This momentum is driven by increasing demand across metropolitan hubs and Tier 1 and Tier 2 cities, where consumers place a premium on speed and convenience. The industrys growth is further accelerated by deeper digital payment penetration, AI-enhanced inventory management, and advancements in last-mile logistics.

Key Growth Drivers

Changing Consumer Behaviour

Urban consumers, particularly millennials and Gen Z, are seeking instant gratification, shifting from traditional e-commerce models to ultra-fast deliveries.

Expanding Product Categories

Initially focussed on groceries and essentials, quick-commerce platforms are now diversifying into pharmaceuticals, electronics, fashion, and home essentials, further accelerating market adoption.

Powering Logistics with Tech

AI and data analytics are enhancing route optimisations, warehouse automation, and demand forecasting, enabling companies to scale efficiently.

Intensifying Competitive

With major players like Zepto, Blinkit, Swiggy Instamart, and Dunzo expanding aggressively, new entrants and retailers are also integrating hyperlocal delivery models to compete in this dynamic space.

Outlook

Indias quick-commerce market isnt slowing down anytime soon. With more investors betting big and retailers fine-tuning their logistics, the industry is set for steady growth in 2025. But with competition getting tougher, brands will need to stand out—whether through better service, smarter pricing, or stronger customer relationships. Government policies and better infrastructure will also shape how fast and far the sector can go. One thing is certain: shopping habits are changing, and quick-commerce is at the heart of it.

Source: https://www.business-standard.com/ industry/news/e-commerce-market-size-to-jump-over-4-times-to-550-bn-by-2035-report-125022000914_1.html

Financial Review

Standalone for the Year Ended March 31, 2025

Financial Metrics	2023-24	2024-25
Turnover ( in Crores)	2,049.22	1700.92
Return on Equity (%)	N.A*	N.A*
Net Asset Value per Share ()	(12.12)	(32.55)
Earnings per Share ()	(23.50)	(20.50)

 

Consolidated for the Year Ended March 31, 2025
Financial Metrics	2023-24	2024-25
Turnover ( in Crores)	2,345.03	1995.20
Return on Equity (%)	N.A*	N.A*
Net Asset Value per Share ()	(46.14)	(73.40)
Earnings per Share ()	(29.53)	(27.33)

*As the net-worth is negative as of March 31, 2024 and March 31, 2025.

Standalone Ratio Shifts

Particulars	2023-24	2024-25	% Change
Interest Coverage Ratio	(1.69)	(0.73)	(57)
Operating Profit Margin (%)	(4.51)	(3.11)	(31)
Net Profit Margin (%)	(10.34)	(10.86)	5
Earnings per Share ( )	(23.50)	(20.50)	NA
Return on Net Worth (%)	N.A*	N.A*	N.A*
Debt-Equity Ratio	N.A*	N.A*	N.A*
Debtors Turnover (Days)	3.86	5.34	39
Inventory Turnover (Days)	40.18	38.45	(4)
Current Ratio	0.37	0.25	(33)

*As the net-worth is negative as of March 31, 2024 and March 31, 2025.

Consolidated Ratio Shifts
Particulars	2023-24	2024-25	% Change
Interest Coverage Ratio	(1.79)	(0.96)	(46)
Operating Profit Margin (%)	(5.04)	(4.11)	(18)
Net Profit Margin (%)	(11.35)	(12.35)	9
Earnings per Share ( )	(29.53)	(27.33)	NA
Return on Net Worth (%)	N.A*	N.A*	N.A*
Debt-Equity Ratio	N.A*	N.A*	N.A*
Debtors Turnover (Days)	3.52	3.98	13
Inventory Turnover (Days)	41.39	39.98	(3)
Current Ratio	0.38	0.26	(33)

Risk Management Approach

In a world of uncertainty, Spencers stands firm with a vigilant risk management approach that identifies challenges before they arise. Through careful assessment and strategic foresight, the Company safeguards its operations, ensuring strength and longevity in an ever-shifting business space.

Risk Domain	Description	Mitigation Strategies
Inventory Risk	Nothing frustrates a customer more than an ‘out of stock notice. If supply gaps persist, so does the risk of losing trust and repeat business.	Store operations and supply chain teams actively monitor inventory flow to maintain optimal stock levels.
		The Company leverages real-time tracking systems to ensure accuracy in inventory reporting and forecasting.
		Data-driven stock management facilitates timely replenishments, ensuring seamless availability of products.
Inflationary Risk	The volatility of pricing dynamics, potentially resulting in surplus inventory and a downturn in consumer purchasing behaviour.	Regular inventory assessments ensure efficient stock rotation and timely clearance.
		Thoughtfully curated discounts, enticing promotions, and value-driven coupons breathe life into stagnant stock, turning excess into opportunity.
Competitive Risk	Retail is a high-stakes arena where competition is cutthroat, and only those who evolve, differentiate, and captivate consumers will thrive.	Spencers strengthens brand presence through focussed private-label promotions and strategic initiatives.
		Customer acquisition and loyalty efforts include diversifying product portfolios, exemplified by the acquisition of Natures Basket.
		The Company sets itself apart with premium selections, including Spencers Gourmet, Patisserie, Wine & Liquor, and ‘Epicuisine.
Supply Chain Risk	Logistical bottlenecks pose a risk of supply chain disruptions, potentially causing operational slowdowns.	By utilising distribution hubs and strategic logistics partnerships, the Company enhances operational efficiency and fulfilment speed. A well-established supplier network ensures reliability in deliveries while safeguarding against potential supply- chain fluctuations.
Quality Risk	A lapse in quality control or service efficiency may weaken consumer trust and long-term engagement.	A proficient service team at Spencers ensures seamless customer support and prompt issue resolution. Comprehensive quality control measures and stringent safety evaluations safeguard product excellence.

People and Culture

Spencers success is built on a skilled workforce that ensures operational efficiency and business continuity. The

Company prioritises an environment that promotes learning, inclusivity, and workplace safety, empowering employees to excel. Additionally, with strong leadership, Spencers remains future-ready and adaptable.

Diverse Talent and Inclusive Workplace

Spencers capitalises on the strength of its experienced workforce to optimise operations, refine strategic direction, and stay agile in a dynamic industry.

A deep-rooted belief in diversity and equal opportunity shapes Spencers hiring philosophy. The Company actively seeks talent from diverse backgrounds, highlighting its inclusive ethos.

Learning and Career Development

Spencers commitment to employee empowerment is reflected in its training framework, designed to enhance expertise and service excellence. The Pragati 2.0 initiative sharpens essential customer engagement skills, nurtures leadership potential, providing employees with a structured roadmap for career progression.

Fostering a Culture of Excellence

Spencers promotes an environment where employees feel empowered, valued, and deeply connected to the Companys objectives. By fostering a culture of excellence and continuous engagement, the Company ensures that its workforce remains motivated to drive innovation and operational success. Moreover, to recognise exceptional contributions, Spencers hosts celebratory events like Regional Festivities, Employee Birthdays, Store Anniversaries, and Retail Employee Day, among others.

Championing Womens Empowerment

Spencers champions gender inclusivity and the advancement of women through bespoke training initiatives like Saheli and Naari Shakti. These programmes are carefully crafted to nurture leadership acumen and accelerate career progression for female employees, empowering them to thrive in a dynamic professional landscape.

Championing inclusivity and empowerment, Spencers introduced all-women stores in Mahamaya Tala, Kolkata. Operated entirely by women, these stores reflect a progressive shift in retail, where female professionals lead every function—from operations and customer service to supply chain and security. With over 26% of its workforce comprising women, Spencers continues to support and celebrate their role as change-makers in the industry.

Rising Star: Fuelling the Future of Talent

The Rising Star programme is the Companys flagship talent identification and development initiative aimed at nurturing high-potential team members for future leadership roles. The selection process follows a rigorous and holistic framework comprising online assessments, one-on-one interviews, and a comprehensive management review to ensure objectivity and business alignment.

In FY 2024–25, a total of 1,011 team members appeared for the assessment. Of these, 265 were shortlisted for the interview rounds, and 137 were ultimately recognised as Rising Stars. Based on their performance across all stages, candidates were designated as Rising Star Gold or Rising Star Silver.

Each Rising Star is mapped to a customised Individual Development Plan (IDP) designed to sharpen strengths, address improvement areas, and accelerate career growth. The programme integrates focussed learning modules, cross-functional exposure, and mentoring to build a future-ready talent pipeline. It reinforces the Companys belief in growing talent from within and translating potential into sustained performance.

Managing Self: Strengthening Frontline Leadership

As part of the Companys broader People Management Programme, Managing Self is designed to build foundational leadership skills among frontline managers. The programme focusses on strengthening personal effectiveness across core competencies such as communication, time management, problem-solving, ownership, and accountability.

To date, over 80 managers, primarily from Store Operations and key support functions such as Category, HR, Marketing, Maintenance, and Loss Prevention, have participated in the programme. Delivered through interactive workshops and reflective exercises, it empowers managers to lead with intent and drive performance through self-awareness and personal excellence.

Internal Control Systems and Their Adequacy

Spencers has built a strong internal control system, designed to protect the Companys interests with precision. Tailored to the depth of its financial and operational complexity, this framework ensures every process aligns with policies, legal requirements, and best practices.

Clear guidelines define approvals and authorisations, while routine audits keep compliance sharp and efficiency high, underlining the

Companys consistent dedication to accountability and excellence.

Spencers internal audit function extends across all facets of the Company, ensuring rigorous oversight of financial and operational controls. By conducting continual assessments, this team identifies opportunities for optimisation and drives enhancements. Spencers commitment to ethical business practices is deeply ingrained within its internal frameworks. To uphold these values, the Company conducts structured training sessions and fosters knowledge-sharing initiatives. Complementing this, the Company offers e-learning courses, enhancing employees comprehension of the Code of Conduct and other critical regulatory policies.

By adopting this all-encompassing approach, employees stay informed and aligned with the Companys goals, ensuring they consistently uphold Spencers guiding principles in their professional conduct.

Cautionary Statement

The statements within the Management Discussion and Analysis section outlining Spencers objectives, projections, estimates, and expectations may be regarded as ‘forward-looking statements. These include, but are not limited to, statements concerning the

Companys growth strategy, product development, market positioning, investment plans, and financial performance. Such statements are based on certain assumptions and expectations regarding future events.

However, there can be no assurance that these assumptions and expectations will prove accurate or materialise as anticipated. The Companys actual results, performance, or achievements may vary significantly from those expressed in these ‘forward-looking statements. Spencers assumes no obligation to publicly update, modify, or revise any forward-looking statements in response to subsequent developments, new information, or future events. Where relevant, certain disclosures required within the Management Discussion and Analysis have been incorporated into the Boards Report to avoid duplication.