Shoppers Stop Managing Director Govind Shrikhande tells Business Today:
The slowdown in demand in India came out of the trillion-dollar meltdown in the US and Europe. It gathered momentum over two quarters, with the health scare in Mumbai and Pune, the stock market crash, the Telangana protests in Hyderabad, and then 26/11 in Mumbai.
All these shocks came one after the other. IT, exports and banking were hit the worst. Our like-for-like sales growth turned negative in the second half of financial year 2009, and continued to remain so till April-June in financial year 2010.
It was a great test of the industry and its fundamentals. Retail thrives in a growing economy, when incomes are on the rise and consumers have great hopes about the future. When consumer sentiment turns negative due to job losses or a drop in income, spending is either skipped or postponed.
When spending is postponed, retail is impacted, especially the clothing and accessory categories. This directly results in a drop in like-for-like sales, impacting profitability and growth. The retail sector saw the death of several players in this period, and a number of others had to re-strategise their formats and balance sheets.
It was a great time for learning. Our board challenged us to create a recession proof model that could face slowdowns. One of our chief learnings from the slowdown was to never compromise on customer experience. Customers should continue to get your best service and merchandise. Only then will they continue to shop with you.
Quite unlike what most companies do in such times, we repositioned our brand and launched a new logo.
|Stories of other companies that faced tough times and emerged stronger, told by the people who were in the thick of things.|
|Nitin Paranjpe on HUL|| Himanshu Kapania on IDEA|
|Mahendra Mohan Gupta on Jagran Prakashan||Rakesh Jain and Sushil Agarwal on Aditya Birla Nuvo|
|Sanjay Lalbhai on Arvind Mills||Peter Mukerjea on Star India|
|Sanjiv Goenka on CESC||Bhavarlal H. Jain on Jain Irrigation Systems|
|Govind Shrikhande on Shoppers Stop||Sunil Pahilajani on Greaves Cotton|
| Anu Aga on Thermax||Sunil Duggal on Dabur India|
|N. Srinivasan on India Cements||Arvind Uppal on Whirlpool|