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Informist, Wednesday, Jun. 18, 2025

 

--Source: Spencer's Retail to expand quick-commerce ops to Lucknow, Varanasi

--Source: Spencer's Retail eyes 67% growth in quick-commerce orders/mo FY26

 

By Avishek Rakshit

 

KOLKATA – Five months after launching its quick-commerce platform Jiffy in Kolkata, Spencer's Retail Ltd. is expanding its app-based ordering services to Lucknow and Varanasi in Uttar Pradesh to increase revenues from this business substantially, an official said.

 

By the end of the ongoing financial year, the retail flagship of the RP-Sanjiv Goenka Group is targeting 300,000 quick-commerce orders a month, against the current 180,000, implying 67% growth. This would entail increasing the daily orders placed on the Jiffy app to around 10,000 from the current 6,000 a day. This could help the company increase the contribution of online sales to its overall revenue to 20% from the current 14%.

 

Following the news, shares of Spencer's Retail, which were largely unchnaged from Tuesday's closing level, rose almost 9% to INR 67.79. At 1508 IST, the stock was up 4.3% at INR 65 on the National Stock Exchange.

 

Spencer's e-commerce app, which has been modified and branded as Jiffy, has around 67,000 monthly transacting users. The average value of orders placed on the app in Jan-Mar was INR 760, the official said. 

 

For comparison, Swiggy Ltd's retail quick-commerce division Instamart has 9.8 million monthly transacting users and an average order value of INR 527. Eternal Ltd., which carries out retail quick-commerce deliveries under the Blinkit brand, has 10.2 million monthly transacting users with an estimated average order value of INR 617.

 

Based on the app's performance in Kolkata, Spencer's is now expanding the quick-commerce service to Lucknow and Varanasi, where it has a considerable concentration of stores. In Lucknow, the retailer fulfils e-commerce orders from nine stores out of a total of 18, while in Varansai, all its eight stores will become fulfilment points for Jiffy. In Kolkata, where the company is headquartered, 29 stores out of a total of 42 are equipped to handle e-commerce operations with a 30-minute delivery proposition.

 

"Consumers would earlier buy grocery three-four times a month. Now, maybe they are buying 10 times a month. They buy in the beginning of the month slightly higher items in value, but then they do a lot more top-up missions during the month. And a lot more of these top-up missions are happening on quick commerce," the official said.

 

Spencer's is not relying on dark stores to fulfil online orders, the official said. Instead, its operational model is based on delivering online orders from the very stores that operate as retail points for consumers. Usually, quick-commerce platforms maintain inventory in local warehouses from where orders are delivered, and shoppers cannot physically buy anything from such warehouses. In the retail industry, these are called dark stores.

 

The official said that through its model, Spencer's is able to minimise inventory overhang as the same inventory at retail stores could be used for online as well as physical orders. The retailer updates store inventory on a real-time basis without any lag once an item is bought at a store.

 

Nevertheless, the company is piloting its sole dark store in Kolkata handling 700 orders a day for a particular neighbourhood in which the company isn't present.

 

In 2024-25 (Apr-Mar), Spencer's downsized its operations considerably and exited south India and Delhi by shutting 44 stores due to accumulated losses on account of lower sales and rising costs in these regions. Currently, the company's operations are concentrated in West Bengal and Uttar Pradesh, where it has a total of 89 stores.

 

In January, the company's chairman, Shashwat Goenka, said Spencer's would open 10-12 new stores in FY26. Around four-five of these would be large-format retail stores, and the rest would be medium-sized or neighbourhood stores.

 

On account of scaling down operations, Spencer's reported a 22% on-year fall in its consolidated revenue for FY25 at INR 17 billion. This includes the revenue from Nature's Basket, which Spencer's had acquired in 2019 for INR 3 billion from the Godrej Group. As a result of store closures, consolidated operating expenses declined around 10% on year to INR 4.3 billion, leading to consolidated losses dropping 7.5% to INR 2.5 billion. The gross margin, however, fell to 19.6% in FY25 from 20.2% in FY24.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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