Avenue Supermarts DMart , the operator of DMart retail chain, saw its shares jump over 7% to Rs 4,299.00 following the company's announcement of plans to accelerate store additions. The move comes as a strategic response to address competition from the quick commerce sector.

Expansion Strategy

The company has firmly rejected concerns that quick commerce would impact its financial performance. In line with its expansion plans, Avenue Supermarts opened a new store in Pathankot, Punjab, bringing its total store count to 426. This information was confirmed in a recent filing to the stock exchanges.

Q1 Financial Performance

Avenue Supermarts reported a modest growth in its standalone net profit for Q1:

The company opened nine new stores during Q1, reaching 424 stores by the end of June.

Challenges and Growth Factors

Despite the revenue growth, profit growth remained relatively flat. The company attributed this to deflation in staple food and non-food product prices, which impacted sales growth by 100-150 basis points.

Other key points from the quarterly performance include:

• EBITDA margin declined to 8.2% from 8.9% year-on-year, primarily due to competitive pressures in the FMCG market.
• Older stores showed a growth of 7.1%.
• Operating costs increased, which the company attributed to improved service levels and wage inflation.

Outlook

Avenue Supermarts' decision to accelerate store additions reflects its commitment to maintaining its strong position in the retail market, especially in the face of growing competition from quick commerce players. The company's expansion strategy, coupled with its focus on improving service levels, suggests a proactive approach to addressing market challenges and evolving consumer preferences.

As the retail landscape continues to evolve, investors will be keenly watching how DMart's expansion strategy impacts its financial performance and market position in the coming quarters.

Avenue Supermarts , the parent company of D-Mart, saw its shares surge 5.5% following management's announcement of aggressive store expansion plans during a recent analyst meet. The company's stock performance reflects investor enthusiasm for its growth strategy, particularly its focus on increasing its presence in Northern India.

Expansion Strategy

Avenue Supermarts has revealed plans to significantly accelerate its store expansion efforts. The company intends to:

• Double down on increasing its store count
• More than double its investments for expansion
• Focus particularly on Northern India

Neville Noronha, a key figure in the company, will be leading the real estate expansion efforts, signaling the company's commitment to this growth strategy.

Recent Store Openings

The company's expansion plans are already in motion. Avenue Supermarts recently opened new stores in:

1. Pathankot, Punjab
2. Pune, Maharashtra

With these new additions, the company's total store count has reached 426, as confirmed in their latest regulatory filing.

Financial Performance

While the company is focusing on expansion, its recent financial performance has shown mixed results:

• For the June quarter, Avenue Supermarts reported a 16% growth in revenue
• However, margins narrowed by 80 basis points
• The company cited deflation in staples and non-food products as impacting revenue by 100-150 basis points

Stock Performance

The market has responded positively to Avenue Supermarts' expansion strategy and overall performance:

• The stock has gained 20% recently
• The recent 5.5% jump in share price followed the announcement of the expansion plans

Investors appear to be optimistic about the company's growth prospects, particularly its focus on increasing its store footprint across India. The aggressive expansion strategy, especially in Northern India, suggests that Avenue Supermarts is positioning itself for long-term growth in the retail sector.

As the company continues to execute its expansion plans, market observers will likely keep a close eye on how these investments translate into revenue growth and market share in the coming quarters.