On Monday, shares of Avenue Supermarts fell by 6.1 percent to Rs 2,180 apiece after the supermarket chain reported a 88 percent decline in net profit for the first quarter (Q1) of 2020-21 from the same period a year ago.
On Saturday, the parent of DMart supermarkets posted an 87.61 percent plunge in the consolidated net profit at Rs 40 crore for the June-ended quarter from Rs 323 crore a year ago. Its consolidated revenue declined 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.
DMart's sales were affected by COVID-19 as Indian customers did not care about value purchases amid infection scare and chose to shop at their nearest stores.
"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, talking about its sales between April and June 2020, the peak of the coronavirus panic.
"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.