The year under review proved to be a difficult period for the Indian economy. Thecountry reported a multi-year low GDP growth of 4.2%. The weak consumer sentimenttranslated into relatively weaker spending. At a time when there was a premium onprotecting our fundamentals Spencer's focused on growing its business and reported 8.5%growth in revenues and held its EBITDA margins at 4.6%.
At Spencer's we will accelerate our transformation and deepen our relevance.
We believe that our competitiveness will be derived from omni-channel consumer accessjudicious store rollout distinctive positioning in the minds of our consumers a balanceof lifestyle and essential products a shift towards nonfood & apparel in the productmix prudent management of cash flows growing revenues from asset-light initiatives andremaining alive to sectoral opportunities.
Our principal business- strengthening initiative during FY2019-20 was the acquisitionof Natures Basket. The acquisition was made in view of the strong private brands ofNatures Basket a scale-up opportunity for the brand attractive intrinsic profitabilityand a complementary business model where the aggregate would prove larger than thestandalone sum of the constituents. This gave us an entry into Mumbai and the western partof India opening up a significant growth region for us.
During the year under review we focused on various init iatives to transform NaturesBasket's business model. We focused on integrating the acquired company (and respectiveowned brands) into Spencer's ecosystem by biending the two operations enhancingcross-saie replicating parts of Natures Basket operations into Spencer's andrationalising some unviable Natures Basket stores. By the close of the financial yearunder review the operating cost structure at Natures Basket had improved considerably andthe Company reached our desired negative working capital position.
India accounts for a population of 400 million millennials arguably one of the largestsuch countries. Consumption expenditure was expected to reach ~US$ 3600 billion in 2020and the retail sector continues to be an exciting space. With increased access tosmartphones and low data costs these shoppers prefer an omni - channel shoppingexperience.
The online preference became more visible following the outbreak of Covid-19. Consumersopted to buy essentials and other products from home in a bigger way than they had done inthe past. The result is that India's online grocery market could exceed US $3 billion insales in 2020 a substantial 76% increase over the previous year following a demand spikefor the home delivery of fresh produce.
The pandemic has compelled companies to extend beyond the short-term reality of demanddestruction and focus on initiatives that enhance long-term sustainability.
Spencer's is attractively positioned to capitalise on the omni-channel opportunity TheCompany did not just respond to this sectoral inflection point with a relevant mobileapplication and home delivery; it invested in enhancing proximity to consumers throughphone call-based delivery Chatbots and WhatsApp-driven product delivery using its storesas hubs. Besides Spencer's collaborated with Uber and other delivery partners for productsupply strengthening its last-mile capability.
We are optimistic that the complement of these initiatives will strengthen ourcompetitiveness through this challenging phase protect our fundamentals and empower us tocapitalise when the consumer sentiment turns for the better.
Dr. Sanjiv Goenka