We buy our monthly quota with Grace (apart from other places like local kirana, Amazon, etc.). Here is our bill for yesterday:
Discount for FMCG items (leaving out private label items, vegetable, utensils) ranges from 1.7% to 5.5% only. Average about 2.5% discount on MRP. Of course there is no DMart but there is a More, Reliance and Big Bazaar near by.
Apart from the discount that Dmart offers, there are bank offers for Dmart (of course some are limited period only and with TnC):
- 5X reward points for American Express SmartEarn Credit Card
- 10% cashback for HDFC Bank’s PayZAPP (valid for Dmart Ready only)
- 7% discount on Visa Contactless card
I have not seen any other offline retailer offering bank offers like the way DMart does. If we are able to take advantage of these offers, the cost for consumers comes down even further.
DMart still does not accept Sodexo card/coupons (maybe due to high MDR?) which if they start accepting, there will be even more sales. I know folks who buy at Nilgiris (and other sales at MRP places) because they accept Sodexo cards.
DMart has good store count only in Maharashtra, Gujarat, Karnataka, Telengana and Andhra Pradesh.
And even in the above states, there is opportunity to open more stores and offer alternate formats like DMart Ready.
I think it is easy to sound smart by being bearish (“expensive valuations”, “Something to worry about for 110PE stock”, “What kind of returns should a retail investor be expecting by investing at these rates”, etc.). It is very rare to see a minority shareholders friendly company who put consumers before shareholders. HDFC group is very shareholders friendly but IMHO, they are concerned more on profits than customers. MNC companies are again not worried about quarterly results but they aren’t that pro consumers.
Avenue Supermarts is one of a kind company and the valuations reflect that. I feel we can’t buy gold at silver rates or Re 1 for 50 paise. 