Will start e-commerce service in Kolkata and NCR, eyes sales from festive shopping before Durga Puja and Diwali
Sanjiv Goenka-owned Spencer's Retail is turning omni-channel with the launch of its online version by the end of August. The e-commerce service would be launched in Delhi and Kolkata to begin with.
Goenka had in December bought a small Delhi-based troubled grocery e-retailer meragrocer.com whose IT system has now been reworked and aligned with Spencer's own systems, which are now complete, sources said.
"While Spencer's is strongest in the east, the online grocer was based out of Delhi. So, we have decided to launch the service in the National Capital Region and Kolkata initially," Spencer's officials told dna.
"The target is the festive shopping before Durga Puja and Diwali, a large part of which now happens in the online space," officials said.
Spencer's move to tread the omni-channel path, combining brick-and-mortar sales along with e-commerce, is aimed at achieving a definite breakeven in profitability, at the operating level at least, by the end of this financial year.
Spencer's, despite earning operating profit on the store level every month since 2010, continues to bleed on the net and ebitda (earnings before interest, tax, depreciation and amortisation)-level, forcing Goenka to keep pushing back the targeted turnaround deadline of the retail venture initially set at 2010-11.
Now, Goenka's son Shashwat is steering the business following the exit of managing director Mohit Kampani in June.
"Spencer's is being managed hands-on by Shaswat Goenka (Sanjiv's son) who is the brain behind Spencer's online foray," sources said.
Spencer's, which has over 1.1 million square feet of trading area across 118 stores, suffered a loss of Rs 142 crore on the net level on a turnover base of Rs 1,865 crore during 2015-16.
In the brick-and-mortar format, Spencer's has some aggressive growth plans to reach about 2.5 lakh sq ft of trading area with 15 new stores in the next two years.
Large format stores are clear focus area with 8 new hyper stores to be opened in 2017 across the country.
"The focus would be on improving the non-food business and in-store experiences as well as building team capabilities to support the company's growth plans for the business. Overall, Spencer's is moving closer to achieving operating breakeven in FY17," Annual report of CESC, Spencer's parent company, said.
The foray in e-commerce will now help Spencer's leverage its sourcing and warehouse infrastructure.
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