Value retail chain V-Mart Retail expects to raise prices between 2% and 5% on select products over the next one to six months as elevated oil prices continue to squeeze input costs, even as the company posted a strong first quarter and remains upbeat on festive season demand.
Q1 Performance And Festive Outlook
V-Mart's revenue grew nearly 23% in the first quarter, with same-store sales growth of almost 8%, or 9% on a blended basis, Chief Operating Officer and Chief Financial Officer Anand Agarwal told NDTV Profit.
The company's value retail chain, Unlimited, expanded 13% during the period. Agarwal said the momentum has carried into the festive season despite earlier concerns over geopolitical tensions, inflation and a weak monsoon.
"We have not seen any significant dip in consumption across the towns. We're seeing a pan India sort of a stable momentum," he said, adding that the company has entered the festive period "with a strong footing" backed by robust inventory and planning.
However, Agarwal flagged that the September quarter may not match last year's growth because Durga Puja falls in the following quarter this year, unlike in the previous year.
"Quarter two might not see as much of growth as last year," he said, though he expressed confidence that growth would even out when measured across a combined 75-90 day festive calendar spanning the two quarters.
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Pricing Strategy Amid Cost Pressure
On margins, Agarwal said oil prices had weighed on input costs over the past four to five months, but the company has largely held pricing steady through value engineering and adjustments to its product mix.
He clarified that the company was not simply selling through older, cheaper inventory, with more than 90% of festive stock being freshly procured.
"There might be a little pressure on the margins, I'm not denying that, but because we will be taking between 2 to 5% price hike in selected products, that impact might also get mitigated," he said.
Low-Cost Marketing Model
Agarwal added that V-Mart continues to rely primarily on word-of-mouth and digital outreach to its loyalty base of over eight crore customers, rather than heavy outdoor advertising spend, citing a repeat customer rate that has consistently exceeded 70%.
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