Spencer's to open 80 new hypermarkets

Spencer's Retail, the retail devision of the RP-Sanjiv Goenka Group plans to invest at least Rs 250 crores to open 80 new

hypermarkets across the country over the next 4 years. The company is mulling an initial public offering sometime next year to fund its expansion plans.

The aim is to aggressively expand to take the store count beyond the 200 mark from the current figure of 127. While only 33 of the current Spencer's outlets are hypermarkets with store size in excess of 20,000 square feet, the additional 80 stores that are planned in north, south and east India will be compact hypermarts, strategy planned by the group last year.

Last financial year, Spencer's added 11 stores and it plans to add the same number of outlets this year. Sales growth in the first quarter of the fiscal has been higher than the corresponding period last year. The per square foot revenue at its stores was Rs 1,220 in 2013-14 and has increased to over Rs 1,300 in the first quarter of 2014-15.

Also to improve margins, the company has decided to increase its apparel and general merchandise mix. At present, 80 percent of the revenues are generated from food, a low margin business. The chain will try to increase the higher margin non-food business, particularly casual wear and kitchenware, to 25 percent in a couple of years.