HDFC Securities: India’s Retail Flywheel

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.HDFC Securities Report.The COVID-19 pandemic playing havoc in the high fixed cost Food and Grocery space is a foregone conclusion. More important is to assess which business model survives an extended version of the pandemic. This led us to assess multiple cost of good sold of the proverbial retail flywheel: (1) Location, population density and per capita income (2) impact on general merchandise, cost of retailing and fixed cost cover, (3) fear-inflicted shifts in consumer behaviour and consequent habit formation and (4) selection and discounting trends. While most grocers are likely to see severe footfall cuts, our district-wise store map approximately 600 districts on COVID-19 severity, population density and per capita income suggests that ~45% of DMart's stores are located in seven of the most populated or impacted districts (Mumbai, Pune, Thane, Kalyan, Ahmedabad, Bangalore and Hyderabad).Online grocery purchases are likely to increase during the pandemic as consumers seek safety. This, in turn, is likely to put pressure on the cost of retailing for the industry as investments in online fulfilment capabilities increasingly becomes imperative..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

HDFC Securities: India’s Retail Flywheel

HDFC Securities says online grocery sales are likely to increase during the pandemic as consumers seek safety of their homes.

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