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Avenue Supermarts Reports 88% Fall In Q1 Net Profit Largely Due To COVID-19

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On Saturday, Avenue Supermarts reported an 87.61 percent plunge in the consolidated net profit at Rs 40 crore for the June-ended quarter from Rs 323 crore in the same period a year ago.

The company that runs the supermarket chain DMart, saw its consolidated revenue decline by 33.22 percent to Rs 3,883 crore in the first quarter of 2020-21 from Rs 5,815 crore a year ago. Its profit margin contracted by 4.5 percent on a year-on-year basis to 1 percent in the period of review.

Avenue Supermarts Reports 88% Fall In Q1 Net Profit Due To COVID-19
 

"Covid-19 continued to spread across the country. The ensuing restrictions have had a significant impact on our operational and financial performance in the quarter. Our revenue, Ebitda and profit for the quarter were significantly lower as compared to the same quarter last year," said CEO & Managing Director Neville Noronha.

With regards to how the coronavirus pandemic and measures taken by the government to control the spread has affected its business, the company compared organised retail in India with that of the developed countries.

"Unlike developed countries where organized retailers had a surge of customers walking into their stores, it has not happened with the same intensity at our stores. This was because of the strong enforcement of store shutdowns, restrictive movement of people in general and strict social distancing rules inside stores. While the overall lockdown rules have softened in general, they continue with the same or more severe intensity in certain cities and local municipalities from time to time," Avenue Supermarts said in a statement.

"India still has a strong and resilient network of small shops and neighbourhood stores. They came roaring back after the first 2 or 3 weeks of lockdown serving the needs of an anxious customer the way the customer wanted it - quickly over the counter or through home deliveries. Value wasn't top of mind for shoppers during this time," it added.

 

The company said that as part of its attempt to make online sales, it started home deliveries (using DMart Ready App) cities, but discontinued it once the stringent lockdowns were withdrawn and stores were allowed to open for business.

Read more about: avenue supermarts
Story first published: Saturday, July 11, 2020, 16:18 [IST]
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