Pantaloons plans price cuts to drive sales
on April 16th, 2009 at 5:49 amTHE Future Group expects its flagship lifestyle retail format Pantaloons would grow its sales by around 35% to Rs 750 crore for the fiscal ending June 30, 2009. The group has undertaken several strategic initiatives to ensure robust growth despite slowdown in consumer demand.
For starters, the group has decided that the price of products sold through the Pantaloons chain will be reduced to the level of 2007. It expects such a strategy will provide a compelling entry-level price point to consumers vis-à-vis competing retail chains. Also, on the cards are plans to expand the Pantaloons private-label portfolio.
Confirming this, Pantaloon Retail India CEO-Pantaloons, Sanjeev Agrawal said that the company has taken a conscious decision to reduce product prices at Pantaloons to that of two years ago. “This will build a value-for-money proposition for consumers and will help to grow sales. Even the new private labels will have a similar pricing strategy,” he said.
Future Group currently operates 44 Pantaloons outlets across India over a total of 1.2 million sqft. The group plans to open six more Pantaloons stores by October, including two in Bangalore and one in Kolkata. On an average, each of the Pantaloons outlet has an operating space of around 25,000 sqft.
“While we are on track with our expansion plan for Pantaloons, but the slowdown of mall construction across the country might eventually impact our rollout plan. This is mainly due to the fact that the Pantaloons format is largely mall-centric and have very few high-street outlets,” Mr Agrawal told ET.
The group is also driving operational efficiency at Pantaloons outlets. This is through tightening of supply-chain and maintaining an optimised product replenishment system. “In fact, our same store growth has also been as per expectations,” said Mr Agrawal. While he did not elaborate further, according to Future Group’s latest investor update, the same store growth for lifestyle retailing in March has been 4.28%.
NEW LOOK
The group expects that the strategy will provide a compelling entry-level price point to consumers vis-à-vis competing retail chains It is also looking at tightening supply-chain & maintaining an optimised product replenishment system The group, which currently operates 44 Pantaloons outlets, is planning to open six more stores.
