It is with a great pride and reflection that I present to you my final annual report ofShoppers Stop as its chairman. It was a year in which we made key decisions to alignourselves to the changing dynamics of the retail industry and secure our long-term growth.
The fiscal was also a remarkable one for the Indian economy and was characterised byimplementation of path-breaking policy reforms such as the goods and services tax (GST).Notwithstanding the initial disruptions across the supply chain over the longer term GSTwill benefit all sections of the economy. Along with enhancing transparency and boostinginvestments it will accelerate the pace of formalisation of the economy which will aidorganised players.
Our economy withstood these hiccups efficiently and registered a growth of 6.7%. Amidearly signs of reviving private investment improving industrial production and favourablemonetary policies the Indian economy is likely to grow at 7.4% in the ongoing fiscal(source: RBI). Rising purchasing power owing to multiple enablers such as a normalmonsoon pay hike for government employees and continued thrust to the rural economy islikely to propel consumption growth in the economy. This will improve the prospects ofIndia's retail sector.
With rapid growth of the online retail segment on one hand and increasingparticipation from foreign players on the other the Indian retail industry is goingthrough an exciting phase. Healthy economic growth improving demographic profile(in3favour of young earning middle-class population) urbanisation and growing prominenceof the Tier-2 and Tier-3 cities are the key growth drivers for Indian retail. The sectoris projected to grow from $672 billion in 2017 to $1.1 trillion in 2020. Further the sizeof India's modern retail could double over the next three years to $111.25 billion(Source:3IBEF Retail Report 2018).
In FY 2018 your Company invested significant efforts into identifying strategicpriorities and strengthening operations. A result of this was that we exited our non-corebusinesses in the mixed retail format entertainment centres and duty-free airportretailing segments. We also accelerated the pace of deleveraging our balance sheet andreduce debt worth Rs. 508 crores during the year. The cash flows freed will be deployed toenhance our business and take the Company to greater heights.
Your Company also put up a healthy performance. Uptick in like-to-like sales coupledwith higher cost-efficiencies and savings in interest costs boosted our overallprofitability. Going forward we will expand our reach with a complementary mix ofbrick-and-mortar stores and our online presence. Adoption of this omnichannel strategywill empower us to stay ahead of the curve by meeting our customers' latent and existingneeds with speed and efficiency.
I reflect on my 20-year plus association with Shoppers Stop with a great pride. As oneof the early entrants in the Indian organised retail sector your Company has earnedlongstanding trust and respect of customers. The fact that our existing customerscontribute 75% of our revenues is a testimony to the healthy bond that we share with them.Over the years we have built a large yet agile retail Company that is ready to deliver apromising future. As I step down from the Board as the Chairman of Shoppers Stop my heartis filled with the love and respect showered upon me by all the people I connected withover these two decades. No words can sufficiently express my heartfelt gratitude to allthe customers employees business associates and investors who have supported us.
I would request you all to welcome Mr. B.S. Nagesh as the Non-Executive Chairman ofShoppers Stop with the same love and respect that you have bestowed upon me in the pastmany years. He has been associated with the Company since the very first day and hasdonned multiple hats throughout its exciting journey. I am confident that under his ableleadership we are uniquely poised to accelerate the growth momentum of the Company. It isour constant endeavour to delight our customers and create value for all our stakeholdersin a sustainable manner.
On behalf of the Board of Directors of Shoppers Stop I want to thank you all for yourcontinued trust confidence and support.
Chandru L. Raheja