The company started with low cost products that consumers needed on a daily basis and could be sold below MRP. According to industry experts, this allowed D-Mart to have a quick inventory turnover, which was used to negotiate better prices with wholesalers. This in turn helped the company maintain the low prices of products.

Damani liked his stores to be more like an assembly chain where products were converted into sales as soon as possible. D-Mart avoided giving seasonal discounts and offered everyday low prices so that customers who walked into the stores would be sure of a 6 % to 10% discount on every product every day compared to other retailers. The company had built a simple philosophy of maintaining quick inventory turnover and everyday low pricing. Anything that did not fall in the meticulous process was avoided ...

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LOOKING AHEAD

D-Mart had 110 stores compared to the more than 500 stores of national players like Reliance Retail in FY2016. The company had a focused business model, was cost efficient, and consistently generated profits. D-Mart’s rental expenses were 0.2% (as a percentage of total expenses) compared to 8.2% of Future Retail. The company also performed better when compared to its competitors in terms of generating consistent profit between 2012 and 2016 (Refer to Exhibit VI). However, according to analysts, D-Mart could find it difficult to continue with its profit-making business model in future as the company expanded its presence in the country.

EXHIBITS

Exhibit I:Revenue of Key Players (FY 2012-16).
Exhibit II (A): Income Statement of Avenue Supermart Limited (2012-16).
Exhibit II (B): Balance Sheet of Avenue Supermart Limited (2012-16).
Exhibit III (A): Stores’ Details.
Exhibit III (B): State-wise Breakdown of Number of Stores.
Exhibit III (C): Distribution and Packing Centers.
Exhibit IV: Share of Retail Spending in Selected Indian States.
Exhibit V: Category Wise Revenue from Sales.
Exhibit VI(A): Market Share.
Exhibit VI(B): Store Footprint of Key Retailers in India.
Exhibit VI(C): Average Sales per Sq. Ft. of Key Players.
Exhibit VI(D): Profit and Loss and Balance Sheet Snapshot of Future Retail and Reliance Retail.