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Informist, Tuesday, Nov. 25, 2025

 

--Source: Spencer's to open 8-10 stores in Bengal, Uttar Pradesh in FY26

--Source: Spencer's to open only large stores, focus on break-even in 1st yr

 

By Avishek Rakshit

 

KOLKATA - After downsizing its operations by shutting down around 47 stores in the last financial year which marked its exit from south India and Delhi, Spencer's Retail Ltd. now plans to open 8-10 new stores in its focus states of West Bengal and Uttar Pradesh in the current financial year, a source familiar with the development told Informist.

 

The retail flagship of the RP-Sanjiv Goenka group has already opened a 6,000 square feet store in the suburbs of Kolkata and a couple of more stores are in the pipeline in the city and in Lucknow. The company is focusing on increasing sales from the existing stores as well. Its gross sales per square foot of store area - a key barometer to measure a retailer's performance - increased by nearly 32% on year to INR 1,626 in the September quarter owing to an improvement in the sales mix. This is despite the company reducing its store count, the source said. The source requested anonymity as the person is not authorised to speak to the media.

 

"The focus is to open stores of a certain size and in areas where returns can be good pretty much in the first month itself without having to wait for a long gestation or a payback period," the source said.

 

Shares of Spencer's recovered following the news. The shares which were down 1.4%, rose to a high of INR 45.57. At 1350 IST, they were up 0.2% at INR 44.53 on the National Stock Exchange. 

 

Spencer's operates a wide variety of stores some of which are small neighbourhood 3,000 square feet stores with a limited portfolio while others are 8,000 square feet stores in big luxury malls housing premium products. The company is now increasingly focusing on the larger stores.

 

The plan to open larger stores is primarily on account of the company's plan to break even on the new stores in the first year of operations itself. The company believes large stores with an area of 5,000-8,000 square feet can yield high returns from the first year of operations but smaller stores with less than 5,000 square feet area will not yield optimal returns.

 

"The 8-10 stores that are being considered roughly have a total trading area of around 100,000 square feet," the source said.

 

Spencer's move to target higher immediate returns on its investments is also driven by its objective to improve its cash position as the company's current liabilities, including current borrowings, exceed current assets by INR 7.5 billion as on Sept. 30. According to the company's annual report for 2024-25 (Apr-Mar), its net worth was negative as on Mar. 31.

 

The company has been focusing on reducing its losses and bounce back to a position where it can address its assets and liability gap. When it exited its pan-India operations, Spencer's reasoned that it was being done to cut losses from the stores and to improve operational efficiency.

 

After shutting 47 stores in FY25, Spencer's gross margin improved to 21% in the September quarter of the current financial year from 17.3% in the year-ago quarter when the company was operating Spencer's branded stores across the country.

 

The source said that top company officials maintain that stores will be the company's top line driver and its growing online business will drive margins. For its online business, Spencer's rebranded its app Jiffy and relaunched it. The app now has more than 100,000 monthly transacting users placing 8,000 orders a day with an average order value of more INR 750.

 

"Spencer's is clearly trying to get the maximum juice out of its existing stores. But it will scale up the online part of the business, because that's where the consumers are migrating," the source said.

 

Unlike its competitors in the quick commerce space such as Swiggy and Zomato which operate dark stores, Spencer's focus is on ‘grey stores'. The grey stores, as Spencer's terms these, are normal retail stores which sell products offline as well as online. Dark stores on the other hand do not sell any product offline but only service online orders.

 

However, given the current placement of Spencer's stores in Kolkata, the company is looking at adding one or two more dark stores in the city which is a departure from its usual norm of operating only via ‘grey stores.' As at September end, Spencer's had a total of 90 stores most of which are 'grey stores' and cater to both offline as well as online sales. 

 

Spencer's reported sales of INR 3.8 billion for the September quarter, down 15%, and its net loss declined to INR 336.7 million from INR 693.3 million in the year-ago quarter. While store closures led to the decline in revenues, it helped Spencer's arrest its losses. In its post-earnings investor call, the company's Managing Director and Chief Executive Officer Anuj Singh told investors that Spencer's is looking at an operational break-even by the end of the current financial year.  End

 

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

 

Edited by Vandana Hingorani

 

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