Retail Sector - QSR, Grocery, Jewellery and Apparel Stocks Performance

Nikita Bhoota Nikita Bhoota 1st July 2022 - 07:15 pm

Retailers across QSR, grocery, jewellery and apparel highlight strong performance YoY on a low base, despite Covid 2.0, though a sequential sales decline occurred. This decline has been varied across sectors, with QSR displaying higher resilience compared with apparel/grocery/jewellery players on account of convenience channel strength. Though footfall in malls/EBOs sharply declined QoQ, it was partly offset by strong online contribution, higher conversion rates and average basket size.

• Lower customer footfall in malls & EBOs strongly hit apparel players in 1Q (SHOP/ABFRL/TRENT/VMART saw QoQ sales dip of 70%/57%/58%/50%, resp). This was partly offset by growing omnichannel contribution, higher conversion rates and larger ticket sizes. Page, selling more essential apparel and with higher salience of General Trade/MBO stores in neighborhoods, saw a smaller decline, of 43%. In jewellery, Titan and Kalyan saw a QoQ sales decline of 55% and 52%, respectively, with the lower contribution of studded.

• QSR performance was driven by robust growth in the convenience-channel (delivery & takeaway). Within QSR, JUBI saw lower sequential sales dip of 14% vs Westlife (-28% QoQ) & Burger King (-24% QoQ). Dine-in format saw muted sales on operating restrictions.

• DMart (QoQ sales down) and Reliance Retail grocery were impacted by stringent restrictions on store operating hours and poor product mix (mainly essentials). E-commerce formats for both players, i.e. DMart Ready and JioMart, however, saw strong YoY growth as both players maintain their online thrust.

Retail Stock Performance:

Nifty 50 has rallied 45% from Aug 25, 2020- Aug 25, 2021. Here, we have discussed some of the retail stocks that have surpassed Nifty 50 index performance or have given positive returns in the same period.

Company Name	25-Aug-20	25-Aug-21	Gain
Jubilant FoodWorks Ltd.	2,106.9	3,827.7	81.7%
V-Mart Retail Ltd.	2,030.8	3,582.6	76.4%
Avenue Supermarts Ltd.	2,341.2	3,789.7	61.9%
Titan Company Ltd.	1,136.5	1,822.7	60.4%
Page Industries Ltd.	20,392.5	31,061.4	52.3%
Westlife Development Ltd.	379.0	512.7	35.3%
Shoppers Stop Ltd.	181.4	240.1	32.3%

_{Source: Ace Equity}

Retail stocks have given huge returns in the past one year. Jubilant FoodWorks Ltd rallied the most 81.7% from Aug 25 2020- Aug 25, 2021 followed by V-Mart Retail Ltd 76.4%, Avenue Supermarts Ltd 61.9%, Titan Company Ltd 60.4%, Page Industries Ltd 52.3%. Shoppers Stop Ltd jumped the least 32.3% in the same period.

_{Disclaimer: The above report is compiled from information available on the public platforms. These are not buy or sell recommendations.}