Source:timesofindia.indiatimes.com
Heritage Foods, the homegrown dairy brand founded by Andhra Pradesh chief minister N Chandrababu Naidu, is firming up plans for an aggressive e-commerce foray to accelerate turnaround of its retail business, which has been a drag on profitability.
Eyeing to record positive EBITDA next fiscal with the help of various overhaul measures, the Hyderabad-based firm will look at hiving off the retail business into a separate company to rope in financial or strategic investors, said Executive Director Nara Brahmani, the Stanford educated daughter-in-law of Naidu.
“We will be EBITDA positive by next fiscal and we are proud to say that we will be India’s first full grocery retailer to do so,” she told ET in an exclusive interaction. The company, which posted Rs 2,073 crore of revenue last fiscal, had reported 30.7% growth in retail business sales atRs 495 crore with store level EBIDTA reporting nearly 61% growth at Rs 35.4 crore. Based on business revamping advises of consultancy giant KPMG, the retailer has, over the past few years, focussed on relocation, resizing and renegotiating the retail stores to reach growth phase with over 20% annual growth.
Heritage Foods, which has been repeatedly bagging prestigious retail sector awards for improved parameters such as sales productivity, sales per sq ft and average bill value among others, has seen 22% increase in store space and 19% increase in retail business.
The retailer has been focussing on increasing aisle spaces, adding checkout counters and improving assortment at its retail stores.
“We are working on ecommerce initiative, which we feel would work as a fantastic complement to the existing business, improving convenience for our customers,” said Brahmani, adding that the company was testing technology over the past few months to launch the pilot at the Banjara Hills branch in Hyderabad. Heritage Foods plans to roll out the ecommerce initiative across all its retail stores spread over major cities by the end of the next fiscal year.
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