Shopper’s Stop – First Citizen Most Loyal Customer Base

The Management of Shoppers’ Stop expects substantial structural cost savings. Shopper’s Stop is renegotiating its power tariffs and expects to save a potential 15% of the total energy cost for the company. Adverse credit conditions did affect the bargaining power of real estate players/mall developers in F09. Same Store Employment costs are down to 5-5.5% of revenue at the corporate level and at 4% of revenue at store level.

Will roll out three new hypermarkets [Hypercity] by end of F2010. At a store operating level, all three existing Hypercity stores have broken even on aggregate basis.

Cross Word and Mother Care have become profitable and can fund their future growth. Time Zone is close to a break even at PAT level. Airport store Arcelia, however
continues to suffer due to reduced footfalls from the global flu scare and general macro slowdown.

First Citizen (Shoppers Stop’s loyalty programme) accounts for 74% of the revenue. Though appreciative of its highly loyal consumer franchise, management intends to bring this ratio down by attracting non-members too. The company is more comfortable keeping the number
closer to 65%.

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