Spencers Retail Ltd Management Discussions.

Spencers Retail Limited (‘Spencers, ‘SRL or ‘the Company), a part of the RP-Sanjiv Goenka Group (‘RPSG Group, ‘RP-SG Group or ‘the Group), is a multi-format business retail industry in India. Along with its Subsidiaries, the Company operates across various categories such as Staples, Fast-Moving Consumer Goods (FMCG), including food items like Beverages, Fruits & Vegetables, Fish & Meat and non-food items such as Fashion, General Merchandise, Personal Care, Home Essentials and Electrical Electronics. The Company has also established a differentiated recall through a speciality section comprising Spencers Gourmet, Patisserie, Wine and Liquor. Our wholly owned subsidiaries include Natures Basket Limited, a one-stop destination for multi-cuisine cooking needs and a preferred destination for gourmet & gifting, and Omnipresent Retail India Private Limited which serves our customers through Omni-channel presence at chosen geographies.


The year 2020 started with a slowdown in global GDP growth because of a multitude factors, only further aggravated by the outbreak of the COVID-19 pandemic. Globally, Governments declared lockdowns with various other restrictions on economic activities to curb the impact of the virus – leading to a contraction of 3.5% in the global economy. The lockdown majorly impacted international trade, slowing down freight and logistics movement while also pulling the oil and metal prices down. Supply chain disruptions and announcement of policy restrictions during the early part of the pandemic severely impacted food prices, while making its easy availability a cause for concern for most of the world economies. Governments across the world intervened with various fiscal and monetary measures to protect businesses and people from economic disruptions. Tax cuts, investment incentives, changes in tax-filing deadlines, and strengthening health infrastructure, among others, were some of the measures initiated. Most economies reciprocated to the Government measures positively, leading to some rebound.

In a year battered by a major global health crisis, certain other prominent events affected the world. However, with the easing of lockdowns, most economies gradually opened up, albeit, in a staggered manner.


The economic systems are gradually adapting to the new normal, with inoculation drives being implemented the world over, boosting economic prospects. Thus, leading towards recovery of overall demand and consumption growth. This could turn the tables favouring most economies and help gather an economic growth momentum across countries. We are already witnessing a synchronised global effort to fight the pandemic, which is eventually likely to lead to a rebound in the emerging markets as well in the advanced economies in 2021. In accordance, the global Gross Domestic Product (GDP) is estimated to witness a 6% growth in 2021. In line with this, a few major GDPs are expected to bounce back. The Emerging and Developing Asian market is estimated to grow at 8.6%, followed by the US with 6.4%. The European region is projected to grow at 4.4%.


The financial year 2020-21 was a roller-coaster ride for the Indian economy. It started with declining GDP growth, growing unemployment and slowdown in various sectors. The outbreak of COVID-19 in early 2020 and the resultant lockdown to restrict further spread, brought the economy to a standstill. The Government, however, at different intervals during the pandemic, announced various measures: In Q1 of FY20-21, a number of measures were undertaken to arrest the economic downslide resulting from lockdowns. The Government stepped forward with schemes like the Pradhan Mantri Garib Kalyan Anna Yojana – a food scheme covering about two-thirds of the population; support for the MSME sector through provision of collateral-free loans with an allocation of Rs 3 lakhs Crores; partial credit guarantees to help NBFCs; concrete actions to boost employment amongst others. Besides, the cushion of massive forex reserves, gave the Reserve Bank of India (RBI) enough room to cut rates at different phases during the fiscal year.

Further, to provide additional relief to the economy, the Government announced a Rs 20-Lakh-Crore (estimated at 10% of the GDP) stimulus package under the Aatmanirbhar Bharat scheme in the Q2, with an aim to make self-reliant, resilient India. Together, these resulted in a low cost of capital and positioned Indian businesses well to accelerate their capital investments. After two consecutive quarters of negative growth, the economy posted positive numbers in the Q3 of 2020-21.

In Q4 of 2020-21, improved demand and consumption aided strong output. Similarly, the private sector and Government-backed capital spending took off sharply for the first time in the pandemic-hit year. Inflation was on a higher side in 2020, and according to Statista, the average inflation rate for the year 2020 stood at 6.2%. The food inflation witnessed an increasing trend, to reach a six year high in October 2020, having stood at 11.07%. Whereas, in March 2021 food inflation stabilised to 4.94%. This was on account of a demand-supply mismatch, with the latter aggravated by a disrupted supply chain, labour shortage and higher transportation costs. Subsequently, however, there was a recovery in production with the Purchasing Managers Index (PMI) for manufacturing in March 2021 being recorded at 55.4. Yet, with the rise of the second wave of COVID-19 in March 2021, the nation is cautiously optimistic.


The Indian economy is estimated to be one of the fastest-growing economies globally in 2021, with a GDP growth of 12.5% according to the IMF. A few downside risks such as rising inflation, wider fiscal deficit and newer COVID-19 wave could, however, dampen this growth projection. The recovery would majorly depend on how fast the population gets inoculated.



The Indian Retail Industry is one of the most dynamic and fastest-growing industries in India. In terms of market size, currently, India is the worlds fifth-largest global destination in the retail space. The sector contributes to over 10% of Indias GDP and generates 8% of total employment. It offers various durable and non-durable products, including food & beverages, electronic appliances and apparels and so on. According to the Retailers Association of India (RAI), the Indian Retail Industry has more than 15 million traditional and modern retailers.


Spencers take

Spencers has pioneered as a multi-format modern retailer and marked its presence in the Indian organised retail industry. The Company provides an assortment for both food and non-food items fulfilling various customer needs and provides seamless shopping experiences across Spencers and Natures Basket.

According to Forrester Research, Indias retail market was worth $883 billion in 2020, of which grocery retail accounted for $608 billion. Most of Indias grocery retail comes from kirana shops, small-and mid-sized mom-and-pop outlets. These kiranas constitute 75-78% of the retail industry. Supermarkets account for about 12-15% of consumer goods sales. Mini-supermarkets have also been on the rise, catering for the demands of urban shoppers who buy supplies in smaller volumes daily. Additionally, there is e-commerce which has seen a phenomenal growth of late and currently accounts for about 5-7% of the Indian retail industry.


Spencers take

Spencers serves its customers through Large-format and Small-format stores. The Company generates 81% of its revenue from the Large-format stores and 19% from the Small-format ones. Additionally, the Company has widened its presence in Out-Of-Store service, including E-commerce sales. Further, Spencers subisidiary Natures Basket, contributed ~15% to the total revenue in the previous year.


The pandemic has made it imperative for retailers to go beyond normal channels and adopt a ‘OMNI-Channel approach – converging sales through both digital and brick-and-mortar shops.

The amalgamation of offline and online services will steer the Indian retail industry, going forward. It is expected to surpass the $1.70-trillion mark by 2026 – an increase of over 80% compared to 2018.

(Source: https://www.statista.com/statistics/1021352/india-organized-retail-market-value/)

Spencers take

The future of retail is ‘OMNI-Channel, converging sales through both physical stores and online. Retailers with unique and differentiated positioning will continue to do well. Organised retailers are likely to benefit with consumers tilting towards organised space. The Company is continuously enhancing its omni-channel approach and strengthening its ‘Out-Of-Store delivery channels to continue to co-serve with brick-and-mortar channels. A significant traction has been witnessed in the Out-Of-Store channel post the COVID-19 outbreak, which can be largely attributed to a switch to higher home deliveries, on account of lower physical store visits and quest for higher convenience. The Company has already been offering online shopping options through its website and mobile app. During 2020-21, it also pioneered in Phone and WhatsApp Chatbot ordering, along with various tie-ups, including Uber, Swiggy, Dunzo, RWAs and others to strengthen its Out-Of-Store channel. Spencers have witnessed 6.5x growth in their E-commerce Business from 2018-19 and 4.5x growth from 2019-20.


Organised retailing refers to trading activities undertaken by licensed retailers. It comprises modern retailing with multi-stored malls, shopping malls complexes and hyper and supermarket, offering a wide variety of products. The sector majorly generates its revenue from Food & Grocery, while other contibutors to the industry include Apparel and Footwear, FMCG and IT, Jewellery and Accessories, Health and Entertainment amongst many others.

India ranks 2nd in the Global Retail Development Index (GRDI) in 2019 – an annual study that ranks the top 30 developing countries for retail expansion worldwide. This growth is primarily attributed to the developments in the ‘organised retail space, including large-scale chain stores operating using modern retail management techniques like time management systems, better in-store experiences for customers, integrated supply chain management systems, using AI and ML and other effective technological tools amongst others. The traditional kirana shops have largely dominated the Indian retail market in the past. Now, many organised retailers are tying up with these stores, helping them enjoy a more comprehensive geographical presence. This, while also increasing the portfolio of offerings to the customer. On the other hand, it is also helping small shops with a digital presence to expand beyond their typical catchment areas. However, lately, the organised retail industry has undergone some significant changes to become one of the fastest-growing segments in India. Strong internet penetration, changing demographic profile, brand consciousness, urbanisation, entry of foreign retailers, value for money and different shopping experiences were some of the reasons behind such a propel in demand.

(Source: https://rai.net.in/images/insights/RAI-Anarock%20Retail%20Report.pdf)

Despite all these changes taking place in the Indian retail segment, Indias organised markets retail share stands at a mere 10% in 2021. It is highly under-penetrated compared to other markets such as the US and Malaysia, having penetration levels of 85% and 55%, respectively. This bodes well and gives room for expansion to the Indian players to penetrate deeper into the market.

The spread of the COVID-19 pandemic impacted almost all industries across the world. However, the ‘organised retail space witnessed an upswing fuelled by the demand for essential items such as food, drugs and household basics. Besides, in contrast, there was a plunge in demand for recreational, luxury, and other non-essential items. People preferred not to indulge in leisure activities, gatherings, and events because of various uncertainties, leading to this dip.


Spencers take

Opportunity for ‘uniquely positioned retailers

Out of the total organised retail share market, Spencers currently caters to ~72% of the segments. These comprise Food and Grocery, Apparels, General Merchandise, Consumer Durables, Mobile and IT, Furniture and Household items and Footwear. Amongst these, the Grocery segment, having an overall market penetration of only ~ 5%, provides a massive headroom for growth for modern trade. And, at Spencers, we are poised to benefit out of the same.


Going ahead, shoppers and businesses would prefer organised retail owing to factors such as Cleaner and Hygienic shopping spaces, Growing Discretionary Incomes, inclination towards Quality Products, Urbanisation and other factors. These factors, along with personalised services, E-commerce growth, ease of payment modes, are expected to increase the share of the organised retail market from 9% in 2017 to 18% in 2021. Parallelly, the kirana stores also contribute equally to the growth of the retail market, as they continue to co-exist with large retail. Besides, the market size of online retail in India is expected to increase going forward.

Spencers take

Spencers is adept with the growing industry trends. The Company is growing and enhancing its customer reach by opening new stores at different locations, expanding into the untapped regions. The strategic acquisition of Natures Basket in July 2019 has enabled us to expand reach in Maharashtra and other western Indian markets. The Company has opened 12 new SRL + 2 new NBL stores, adding more than ~1.09 lacs sq.ft during the year. The Company currently undertakes various in-store initiatives to offer a superior in-store customer shopping experience, while complementing its Out-Of-Store initiatives as well. The Company keeps evaluating its stores and have closed down seven loss making stores which didnt have much potential.

The Company takes utmost care towards maintaining excellent Hygiene and Cleanliness at all its stores right from the lead up sidewalks, to in-store cleanliness, to employee hygiene. Post the COVID-19 outbreak, the Company is taking utmost care and higher caution to ensure timely sanitisation of the stores.


Changing consumer preferences

Consumers today prefer modern retails such as shopping malls, departmental stores, and supermarkets over traditional stores when it comes to shopping. Modern Retail formats offer a better consumer experience throughout the shopping journey. These formats also continuously look to enhance the experience via customer feedback and surveys, thereby gathering consumer insights helping formulate its strategies.

Spencers take

Spencers is fulfilling the changing consumer preferences by providing a great customer experience. The Company offers a range of products under one roof to meet all customer requirements, also offering well-differentiated, unique and diversified Private Brands. Besides, Spencers also ensures a superior in-store experience through ambient, well-lit stores, standardised scientific store layouts to ensure higher cross-selling, benchmarking processes to ensure price competitiveness, great personalised offers and low queue waiting times, amongst others.

Correction in real estate prices

Demand for real estate and rented properties has fallen majorly owing to COVID-19. Today, real estate continues to remain unattractive for investors due to low yields. These have resulted in a drop in real estate prices – giving retailers room to renegotiate the rent price with owners.

Under-penetrated market

Compared to developed and developing nations, Indias low share of organised retail underlines the vast untapped potential. Consumption patterns have witnessed a dramatic shift over the last decade, with higher demands coming from many cities such as Asansol, Bhimavaram, Dhanbad, Guntur, Hyderabad, Lucknow and Noida. Therefore, these regions look promising for retailers such as Spencers, who are looking forward to expand and penetrate.

Spencers take

Spencers already has a wide presence in India in high growth territories and aims to reach further by leveraging the existing presence and opening stores at untapped locations, across cities and towns, owing to the growing demand there. The aim is to open stores, which have long-term viability and profitability.

OMNI Channel model

The rise in ‘Digital Natives and tech-savvy customers augurs well for retailers embracing data-driven and advanced analytics and prediction technology. Often there are multiple entrances for stores of organised players that ensure distancing. Thus, organised retailers favour the ‘Online + Offline model, as they are equipped with the best physical and technological infrastructure and capabilities.

Spencers take

Spencers is focused on becoming a truly omni-channel organised retailer. The Company has undertaken a hyperlocal approach, reaching out to the customers directly. At the same time, it is also engaged in contactless delivery through ‘Out-Of-Store mediums, while taking benefit of the E-commerce growth wave. The Company has also attained a better customer reach with introduction of new brands, products, marketplaces and serving in newer geographies.

Value-creation capability

The organised retail sector operates on a larger scale with mass procurement and sales of products. Moreover, organised retailers offer branded and decent-quality products at reasonable prices. These give them an excellent scope to strengthen the relationship with stakeholders – right from negotiating deals with suppliers, retaining customers, to attracting investors.

Spencers take

Spencers believes in creating value for each and every stakeholder it caters to. It serves its customers better through quick out-of-store service – delivering goods at the doorstep and within specified timelines. During the pandemic, Spencers made sure its customers get the essentials for which the Company has strategic tie-ups such as Uber, Swiggy, Rapido and many others. Further, it has enhanced its reach through a large Residential Welfare Association (RWA) programme, setting up deliveries to reach out to residential societies, and ensure smooth supply to overcome lockdown restrictions.

Safety of employees and customers shall remain the most important endeavour of the Company. With regards to the employees, during the pandemic, the Company provided financial protection to frontline employees through COVID insurance, medical care facilities, and arranging hospital facilities for those in need. It also provided meal-on-site facilities, along with pick-up facilities for them to commute to the stores. Large number of employees have been vaccinatied for free and the drive is continuing.

Demographical advantage

Indias middle-aged population is growing and constitutes about 50% of the total population. At present, 58% of the population is between 15 and 54 years of age. A median age of 29 years, along with growing prosperity, and a corresponding increase in aspirational consumption, have brought about a retail revolution in the country. The proportion of nuclear households is also increasing and has reached 70%, with a projected increase to 74% by 2025. Nuclear families generally tend to spend 30% more per capita than joint families. The number of middle-class consumers in India is also growing rapidly. With rising consumer demands and higher disposable incomes, consumers have been spending more. Nowadays, consumers expect quality products at affordable prices.


Spencers take

The Company believes that the population aged between 18 and 35 years, look for stores which not only provide best in class value to its customer but also a superior service experience and they account for ~71% of household income for which the Company is coming out with various offers to increase the customer base. A wide range of products at affordable prices remains the USP of Spencers. It has carved out a niche through its positioning ‘Makes Fine Living Affordable, which is a precis of the Companys philosophy of delighting shoppers with the best products and services that enhance fine living at reasonable prices in a friendly retail environment. Right price and various offers from Spencers and Natures Basket have helped the Company to attract consumers.

Growing consumption

According to the World Economic Forums report, Indias consumer market is poised to become the third largest consumer market followed by the US and China. The report also states that the consumer spending in India is expected to grow to USD 6 trillion by 2030. The growing consumption is driven by growing households income.


Spencers take

Changing consumption creates opportunities for organised retailers such as Spencers. To grab the opportunity, the Company is trying to enhance its reach through various platforms including digital. Spencers is continuously placing its offerings to the customers and also has in place marketing strategies that help increase the brand recall and create brand awareness.


COVID changing demographical structure

The COVID-19 pandemic has impacted many lives. People moved to their native places from big cities after the pandemic outbreak. Besides, the year also witnessed a significant impact on the income levels, with households reporting a fall in income by about 45.7% in mid-April, 2021. Going forward, this can have a medium-term impact majorly on the consumption of non-essential items in the country.

Spencers take

There were some challenges associated with the offtake of some non-essential items, owing to restrictions on selling of non-food and intermittent lockdowns and the change in overall purchase demographics. However, the Company always believe in offering its products at competitive price ranges, along with multiple product offerings under a particular range.

Aggressive expansion

Inadequate research on store expansion, can lead to retailers opening outlets at unfeasible locations. This can result in low accessibility, visibility, and traffic, affecting the overall operational performance.

Spencers take

Spencers aspires to grow by 1-2 lacs sq.ft. every year. It tries to get a foothold in those geographies where stores can earn higher revenue and footfall. The Company is expanding its presence in its existing clusters. This will also help it leverage its back-end capabilities by optimising its operational and marketing cost. Through thorough research on all fronts, the Company ensures that the stores are opened only in viable locations.

Price war

Price wars can offer short-term solutions in beating peers and pushing up the sales volume. However, it can have adverse long-term effects on profitability, price erosion and customer loyalty. Competition can have an impact on the price margins as well.

Spencers take

The strong distribution network of Spencers provides an option to purchase the product directly from manufacturers. This helps retain competitive pricing as many intermediatories are eliminated, giving the Company a competitive edge.


Over the last few years, Indias e-commerce market has been growing with the increasing internet penetration. Further, the outbreak of COVID-19 provided a filip to the E-commerce Industry. The retail sector witnessed a transformation with a higher number of people stuck at home due to the pandemic. There was a change in the consumer buying behaviour from offline to online owing to higher convenience and safety offerings. In line with the prevailing trend, the Indian E-commerce segment is expected to grow 40% in 2020, grossing $38 Billion Gross Merchandise Value (GMV), up from $27 billion in 2019. (Source: http://www.fnbnews.com/

Top-News/ecommerce-may-become-one-of-the-major-growth-drivers-for-fmcg-in-2021-63838). This growth is not only limited to metros and big cities but the platform is also gaining popularity in Tier-II cities, and beyond. In fact, they now make up for around 66% of Indias total online consumer demand, while the rest of India contributes 34%.


The online retail segment in India is estimated to constitute 25% of the total organised retail market in the financial year 2020-21. It is expected to reach 37% by 2030 due to the blending of physical retail with the digital world (Source: https://www.investindia.gov.in/sector/retail-e-commerce/e-commerce). Over the years, the E-commerce platform has become a conducive ground for testing various business models with the long-term aim of maximising customers value for money. It provides ample opportunities for retailers to acquire new customers, engage better with existing ones, reduce the cost of operations, along with various other benefits that have a positive influence from a revenue and margin viewpoint.

Additionally, efficient, quick and reliable logistics network have further enabled the e-commerce platforms to grow from here. The annual online shopping increased from 110 Million in 2018 to 160 Million in 2020. Going ahead, in 2021-22, the industry will witness many businesses adopting an omni-channel approach. Also, the higher number of COVID-19 cases has led to consumers hesitance to return to in-store shopping. This hesistance could further also dent the E-commerce industry as rising COVID-19 cases can impact household income. The E-grocery market performed well during the year 2020. In February and mid-March 2020, there was a marginal drop in sales because of stock-ups. Further, the outbreak of COVID-19 moved the nation towards strict lockdowns. This led to demand-side growth for grocery items. However, it could not be fully capitalised by the market due to supply chain disruptions. There was a boost in the e-grocery segment for the month of May and June 2020 owing to supply chain revival to some extent. Upon gradual lifting of the lockdowns in a staggerd manner, there was a marginal drop owing to certain households moving towards the conventional purchase methods. However, because of the ease and convenience offered, there was a transition of customers towards e-platform, and the e-grocery market observed a demand uptick.

Spencers take

Gross Merchandise Value Grew by 6.5X from 2018-19, 4.5X from 2019-20

Spencers had already commenced its journey as an omni-channel player a few years ago, catering to the customers needs through its stores, E-commerce Websites and Mobile Application. However, the COVID-19 outbreak, provided huge opportunity and enabled the Company to leverage digital platform and take its omni-channel presence to the next level. The Company utilised the year to increase its investments in mobile application and set up the relevant infrastructure. In addition to this, the Company commenced accepting orders through WhatsApp Chatbot, along with its other digital mediums. This shift helped Spencers to amplify its Out-Of-Store reach further. The Company is well focused to adapt the E-commerce platform for enhancing its customer reach and create a robust logistic network for efficient and quick deliveries.

GROWTH DRIVERS OF E COMMERCE INDUSTRY IN INDIA Advancements in technology adoption

The increasing proliferation of smartphones and access to the internet through broadband, 4G , among others, is expected to lead to an increase in the online consumer base. As a result, the E-commerce consumer base is also expected to witness a subsequent rise.

Spencers take

Through the Companys Omni-Channel network, the Company aims to capture this shift to purchases through the E-commerce routes, and thereby directly connect with the consumers. To enhance customer experience, Spencers invested in a touch screen-driven point-of-sale tool, making it possible for consumers to scan available merchandise faster. The app was also enhanced to provide a "Click & Pick" feature to enable the consumers to pick up the orders from the nearby stores. Spencers consumers are offered with contactless door-step deliveries, paperless e-Invoices and digital payments through 3rd party payment gateways.

Shopping experience

E-commerce gives price-conscious consumers the option to filter the products from cheapest to most expensive. These filters not only help save consumers time and cost, but also ‘humanises the online-shopping experience, meeting users real-life expectations and requirements.

Spencers take

Spencers has always striven to provide a greater shopping experience through an extensive product range and a great in-store experience. With varieties of products under a given SKU, the customer has to his/her disposal, a one-stop-shop. The Company has a multilingual supporting Call Centre comprising associates who are handling customer feedback and queries across all stores. It has different channels like Tollfree Number, Email, Website, Social Media Platforms, Digital YVM and NPS through which customers can reach the Company. Thus, the Company ensures it reaches out to a wider audience, help them with their queries and feedback and ensure giving them a better shopping experience everytime. This back-end support has really helped the Company to reach out to all its customers.

E-commerce promotes savings culture

Markets where the population saves more tend to spend more online. In India, household savings have been declining steadily between 2014 and 2019. Surprisingly, it surged in 2020 to reach $200 Billion in extra savings – a 20-year high. Such savings-aware consumers are generally value-conscious. They actively pursue good deals. This is reflected by the incredible success of Indias E-commerce festive sale season from October 15 to November 15 in 2020. The gross sales for brands reached $ 8.3 Billion (about Rs 58,000 Crores), up by 65% from $ 5 Billion (Rs 35,000 Crores) last year.

Spencers take

Bank accounts are crucial for the vast majority of E-commerce purchases. Credit and Debit Cards, mobile Wallets and UPI are the most popular ways to make online purchases. Spencers provides various digitals options including Internet Banking, debit and credit card payments and payments though mobile wallets as well. The Company also offers payment options where many offers, cashbacks and discounts are given. The Company provides great discounts and cashbacks on different products on timely basis.

(Source: https://retail.economictimes.indiatimes.com/news/e-commerce/e-tailing/indias-e-commerce-festive-season-sees-usd-8-3-bn-worth-gross-sales-report/79457822)


Spencers Retail Limited, a part of the RP-Sanjiv Goenka Group, is a multi-format modern retailer in India, headquartered at Kolkata. The Company provides merchandise across various categories such as FMCG, including food items, and non-food items like Fashion, Staples, General Merchandise, Personal Care, Home Essentials, Electrical & Electronics. The Company also has established a differentiated recall through speciality section comprising Spencers Gourmet, Patisserie, Wine and Liquor, and the recently launched Epicuisine. Spencers runs over 197 Stores (164 SRL and 33 NBL) stores in India, including Natures Basket, which is present in over 41 Indian cities. The Company operates two distinct retail formats – Large-format stores and Small format. Small-format stores cater to the daily and weekly top-up shopping needs of consumers and range up to 5,000 sq.ft in size. Large-format stores have a store size of greater than 5,000 sq.ft.


During 2020-21, the Companys Consolidated Revenue from Operations stood at Rs 2,428 Crores and Gross Margins at 20.40%. Prior to the pandemic, more than 90% of the Companys business came from brick-and-mortar model. However, there was a significant drop in physical footfall in retail outlets owing to the COVID-19 outbreak. It brought many shoppers online and thus witnessed a spike in orders through Mobile App, Phone Delivery and WhatsApp. Online sales channels have proven considerably effective in terms of cost optimisation while giving scope for margin improvement. During the first half of 2020-21, the Company witnessed a huge demand for food products, whereas sales of non-food items were subdued as there was restriction on selling of non-food. Though after September 2020, the Company experienced a surge in sales of non-food items, it was yet to reach the pre-pandemic level, at the time of reporting. The expansion plans for brick-and-mortar stores re-gathered steam post Diwali, as opportunities started outweighing short-term instability. Going ahead, other strategic plans such as focusing on optimal-sized formats, increasing non-food offerings, inclusion of margin-accretive private brands and catering to the omni-channel business mix, will all remain a priority.


Financial Results Standalone for the year ended March 31 Consolidated for the year ended March 31
2021 2020 2021 2020
Turnover (Including other Income) (Rs in Lakhs) 2,11,613 2,40,284 2,48,147 2,67,663
Return on Equity (%) (0.37) (0.14) (0.88) (0.48)
Net Assets Value per Share (Rs ) 38.23 49.70 20.67 34.44
Earnings per Share (Rs ) (14.81) (7.06) (18.99) (16.19)



2020-21 2019-20 % change Reason for Change
Inventory Turnover (Days) 42.00 36.00 0.17
Interest Coverage Ratio (6.25) 0.48 (13.96) Loss of EBIT due to restriction on selling of non-food items due to pandemic.
Current Ratio 0.61 0.72 (0.15)
Debt Equity Ratio 0.10 0.08 0.25 Increase in borrowings during the year and increase in YoY losses due to pandemic
Debtors Turnover 6.00 9.00 (0.33) Well managed our receivables and cleared old dues
Operating Profit Margin (%) (0.03) 0.00 (18.59) Loss of trading hours and restriction on selling of high margin non-food categories
Net Profit Margin (%) (0.06) (0.02) 1.57
Return on Net Worth (%) (0.37) (0.14) 1.57
EPS (14.81) (7.06) 1.10


2020-21 2019-20 % change Reason for change
Inventory Turnover 41.00 35.00 0.17 These ratios are not comparable, since for previous year 2019-20, NBL numbers are only for 9 months
Interest Coverage Ratio (3.83) (2.95) 0.30
Current Ratio 0.59 0.67 (0.12)
Debt Equity Ratio 0.53 0.40 0.33
Debtors Turnover 4.00 9.00 (0.56)
Operating Profit Margin (%) (0.03) (0.02) 0.62
Net Profit Margin (%) (0.07) (0.05) 0.36
Return on Net Worth (%) (0.88) (0.48) 0.84
EPS (18.99) (16.19) 0.17


Spencers has a robust risk-management framework that prevents actual or potential risks. The Company aggregates all the information related to risks using digital tools, external evaluations and audits. The Companys senior management assesses department-wise risks, which are further reviewed by the Board of Directors for creating appropriate risk-mitigating strategies.

Risks Description Mitigation
Pandemic Risk New COVID-19 waves may lead to store closures or result in lower footfalls. The Company has a business continuity plan to smoothly run its business. Compared to other industries, the impact of lockdown was lower for us, as it has essential products as part of its offerings. 90% of stores were operational during the lockdowns. Omni-channel network, which has been strengthened in the last one year, also helped mitigate this risk, owing to increased customer reach through online E-commerce channels. Further, the Company strictly follows all the COVID-19 precautionary measures like temperature check-ups at the entrance and maintaining social distancing at stores, enabling it to safely operate amid the pandemic. The Company has a Business Continuity Plan in place to mitigate any such risk.
Inventory Risk Unavailability of stock inventory could dissatisfy customers, and this can increase the likelihood of them shopping at competitor stores. Store operations and supply chain teams work together and monitor the stock levels regularly. The Companys flexible inventory process helps ensure real-time reports of the inventory. Spencers also reviews the most relevant data points, enabling it to predict inventory levels better. Thus, helping report inadequate storage of products to suppliers and vendors immediately.
Supply Chain Risk The Company could be impacted in the event of disruption to logistics arrangements and distribution channels, which could lead to supply-side delays. The Company closely works with suppliers in a number of territories to reduce the risks of disruption. Spencers has its own distribution centres and has third-party supply chain management arrangements for logistical support. It uses different models to forecast inventories. The Company has a robust inventory management system and forecasts its inventory efficiently. As the Company is dealing with ‘essentials, this early forecasts, help maintain demand and supply balance.
Competitive Risk The retail industry is highly competitive and dynamic. Therefore, the Company competes with a wide variety of retailers of varying sizes. The Company continuously seeks to differentiate itself through Private Brand programmes. Moreover, it looks to retain and acquire new customers through various offers and campaigns. In July 2019 Spencers acquired Natures Basket which has complemented Spencers brand and helped enhance its product range. Spencers also has speciality sections – Spencers Gourmet, Patisserie, Wine and Liquor, and Epicuisine section. These sections are the Companys key differentiators in its stores.
Compliance Risk The Company realises that failure to comply with ethical standards could expose the business to reputational risk and loss of goodwill. One of the biggest risks affecting reputation is the potential that Material Non-Public Information (‘MNPI) may be misused, leading to a charge of insider trading. Regulatory requirements are closely monitored by the Secretarial team having a rich experience and expertise. Moreover, the Company has a ‘Whistle-blower Policy that allows employees to raise concerns in confidence. The Company has developed an in-house tool for Insider Trading Compliance as mandated by SEBI and also implemented a Compliance Management tool in its continuous endeavour to improve Corporate Governance. The Company also has in place a ‘Code of Conduct to regulate, monitor and report trading by insiders in compliance with the SEBIs Prohibition of Insider Trading.
IT Risk The Company is dependent on the suitability of a number of critical IT systems where any sustained performance problems, including those caused by cyber attack, could potentially affect the operational capabilities of stores, centres warehouses and distribution systems. The Company reviews its IT security systems on an ongoing basis. These systems are supported by a number of disaster recovery arrangements with appropriate firewalls in place.
Quality Risk Ineffective product quality and services could lead to a loss of trust and confidence in customers. The products are rigorously tested for quality and safety by dedicated quality teams. Also, customer complaints are considered as purest form of quality control. For this, the service team is trained to listen to them carefully and promptly resolve their issues.


Spencers believes that maximising the energy, skills and potential of each employee will help ensue sustainable growth. The Company is committed to having a healthy and supportive work environment. To follow this, the Company keenly listens to individual concerns and addresses the issues raised through various surveys and feedbacks. The Company empowers employees in a way that encourages behaviour resulting in better performances and value addition for customers. The Company promotes diversity and is striving to establish a corporate culture that embodies mutual respect. It allows employees to play active roles in a workplace that promotes personal growth, diverse values, conducive work environment - free of discrimination and harassment. As on March 31, 2021, the Companys total number of talent pool stood at 5,097, out to which about ~25% are women. Spencers pays special attention to women empowerment for which various training programmes such as Saheli and Naari Shakti are conducted for the women employees. Spencers have also hired people from National Apprenticeship Promotion Scheme (NAPS).


Spencers intricate internal control systems ensure efficient use of resources and compliance with established policies, procedures and statutory requirements. It has developed well-documented guidelines, procedures for authorisation and approvals, including regular audits. The Company has a well-established internal audit framework that covers all aspects of financial and operational controls, across units, functions and departments. It also has an efficient financial reporting system in place. Spencers internal audit team actively engages in the review and improvement of various functions of the Company.


The statements in the Management Discussion and Analysis section describing the Companys objectives, projections, estimates and prediction may be considered as forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the Companys strategy for growth, product development, market positioning, expenditures and financial results, are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Companys actual results, performance or achievement may thus differ materially from those projected in such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statement on the basis of any subsequent developments, information or events. To avoid duplication and repetition, certain heads of information required to be disclosed in the Management Discussion and Analysis have been included in the Boards Report.

On behalf of the Board of Directors
Dr. Sanjiv Goenka
Kolkata, June 15, 2021 (DIN - 00074796)