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

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. 
 

_{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.}