D-Mart faces excess stock issue as lockdown regulations affect retail business

By

Isabelle Crossley

Published
May 10, 2021

Fast-moving consumer goods chain D-Mart’s parent company Avenue Supermarkets is dealing with significant disruption to its retail operations, which is impacting its revenue and creating the issue of excess stock.

From March this year, D-Mart has experienced reduced retail hours which has caused its revenue to drop significantly, ET Bureau reported. Over 80% of D-Mart stores are only opening for four hours a day or less and many are shut on weekends in areas with weekend curfews, according to Avenue Supermarkets. Some stores have even had to shut completely for weeks at a time in areas under total lockdown. 
 
“These shutdowns are having an adverse and severe impact on its revenues,” said Avenue Supermarkets in a statement, the Press Trust of India reported.

“We currently continue to receive a regular supply of goods from our suppliers. However, this time, we may have a problem of excess inventory— an issue larger than the first wave… This could have a longer-term impact on our inventory to sales ratio as we could take comparatively longer time to liquidate the excess inventory.”
 
One step the business has taken to tackle the build up of stock is by expanding its ‘D-Mart Ready’ e-commerce operations. Some localities are not allowing ‘non-essential’ brick-and-mortar stores to open but are permitting e-commerce operations. The business is also optimistic that greater knowledge about the pandemic and vaccines will mean that 2021 retail disruptions last for less time than they did in 2020.