How the quick comm brigade sparked a fall in Damani’s blue chip stock
Subscribe to enjoy similar stories. New Delhi/Bengaluru: They are worlds apart, but both Radhakishan Damani and Mohammed Shafiq find themselves battling a common enemy today. Avenue Supermarts, Damani’s food and grocery retail chain, which operates nationwide, and City Food Point, Shafiq’s small convenience store in Bengaluru’s upscale Indiranagar neighbourhood, are under siege from quick commerce, a retail channel that came into its own during the covid pandemic.
On 14 October, Avenue Supermarts’ shares plummeted 9% on the Bombay Stock Exchange (BSE), suffering their biggest single-day drop since January 2019. Many brokerages downgraded the stock after the retailer’s second-quarter numbers disappointed the Street, fearing worse is to come. It was a rude awakening for the company, whose shares have returned over 125% to investors in the last five years.
Once seen as a trailblazer of sorts in offline food and grocery retail (along with Big Bazaar), Avenue Supermarts, which started out in 2002 and operates 377 ‘DMart’ stores across multiple states today, may be paying the price for not responding to the threat from quick commerce. In a scathing note, brokerage Morgan Stanley said. “We have been defending DMart’s business model for a while.
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