 "Spencer's Retail enters quick commerce space with JIFFY as growth driver")
Spencer’s Retail, part of the RP-Sanjiv Goenka (RPSG) group, announced its entry into quick commerce (qcom) on Thursday in a bid to capture a larger share of the consumer wallet.
The new quick delivery proposition, JIFFY, will be a key growth driver for the business in the coming quarters, Spencer’s Chairman Shashwat Goenka said.
“We are starting with Kolkata, and by the end of the quarter, we will expand to Uttar Pradesh as well,” he added.
After exiting loss-making regions in the second quarter of 2024-25 (FY25), Spencer’s currently has 89 stores across West Bengal and Uttar Pradesh. The RPSG retail arm plans to utilise these stores for deliveries within 30 minutes.
“There will be no additional capital expenditure,” Goenka clarified, adding that there is enough unserved demand in the stores.
“As the business grows, we will decide whether to open more physical stores for consumers, which can serve as dark stores, or to open only dark stores,” Goenka said.
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He added that online growth will be crucial, as that’s where the market is transitioning. “In urban centres, especially, people are moving from ecommerce to qcom.”
Nature’s Basket, a subsidiary of Spencer’s Retail focused on gourmet food, will also relaunch its application by the end of this month with a 60-minute delivery proposition. The definition of qcom in luxury is slightly different, Goenka clarified.
On Thursday, Spencer’s reported its financial results for the third quarter (Q3). The company reported a narrowing of its net loss to Rs 47.34 crore on a consolidated basis in Q3FY25, compared to a net loss of Rs 51.2 crore in the same period last year.
Consolidated revenue from operations stood at Rs 516.97 crore in Q3FY25, down by 20.95 per cent from the year-ago period.
On a standalone basis, Spencer’s reported a net loss of Rs 29.14 crore in Q3FY25, compared to a net loss of Rs 40.97 crore a year ago. Revenue from operations was Rs 431.03 crore, down by 24.4 per cent.
Goenka said that despite a soft festival trading environment, the decision to exit loss-making non-strategic regions and improvements across all operating metrics resulted in milestone earnings before interest, tax, depreciation, and amortisation/Ebitda (pre-Indian Accounting Standard/Ind AS) positive achievement, which came after 22 quarters.
Ebitda at Rs 17.5 crore was up 46 per cent year-on-year. Spencer's aims to be profit after tax-positive in the next two financial years.
Last quarter, Spencer's announced a ramp-down of operations in the South and National Capital Region, discontinuing operations across 47 stores. Spencer’s will focus on West Bengal and Uttar Pradesh for “many quarters” before considering further expansion. In the next year, plans are in place to open 10-12 stores.
“We said we would shrink to grow, which is what we did. And we are seeing the positive result now,” Goenka said.
Nature’s Basket, which has a pan-Indian presence in major cities, may add three to four stores next year. At present, Nature’s Basket operates 34 stores in Mumbai, Pune, Ahmedabad, Kolkata, and Bengaluru.