Since consumer preferences have witnessed a shift, of late, owing to the global coronavirus pandemic, retail stores have been experiencing less footfalls. Most shoppers now prefer staying indoors and buying from local or online stores.
Reliance Retail too had to bear the brunt of the crisis, as it reported a 14 per cent fall in operating profit while revenues remained flat.
The company’s retail division – operating around 12,000 outlets offering products across categories including apparel, groceries and electronics – registered sales of Rs. 41,100 crore with earnings before interest, taxes, depreciation and amortisation (EBITDA) at Rs. 1,986 crore.
As far as the company’s growth graph is concerned, it was found to show strong results compared to sequential quarter revenues growing 30 per cent and EBITDA increase 85 per cent against the June quarter.
It must be highlighted here that Reliance Retail opened 232 new stores during the second quarter, maintaining that it has plans to accelerate further as operating curbs are being lifted.
“The operating environment continues to remain challenging. Although it is clearly better off than last quarter, store functioning continues to be impacted… and we had about 15 per cent of our stores shut right through the quarter. The balance 85 per cent, half of them, operated fully and the remaining half, partially,” said Dinesh Thapar, Group Chief Financial Officer.
“We are well positioned at this point of time to restore momentum to pre-COVID levels assuming all goes well and directionally operations start to ease out,” he added.