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Avenue Supermarts, the parent company of DMart, continues its strategic expansion with the acquisition of a 1.2-acre plot in Mumbai's Chandivali suburb for over INR 117 crore. This move highlights DMart's unique approach of owning retail space, enhancing control over design and operations while ensuring long-term stability. This acquisition follows previous ventures, including a substantial investment in a Pune distribution center and acquiring a cold chain logistics company. With 367 supermarkets nationwide and a net profit of INR 2,536 crore in FY24, DMart's focus on ownership sets a new standard in the retail sector, challenging traditional leasing models and driving aggressive growth.
Avenue Supermarts, the parent company of the popular DMart supermarket chain, has acquired a 1.2-acre plot of land in Mumbai's Chandivali suburb for over INR 117 crore. This move reflects DMart's commitment to a unique strategy of owning their retail space, setting them apart from many competitors who primarily rely on leasing. Advertisement
The Chandivali plot, currently housing an industrial building, is valued at over INR 117 crore. DMart plans to develop this land into either a retail shopping center or a commercial building, demonstrating their long-term vision for expansion. DMart's ownership approach stands in contrast to many other retail chains that primarily rely on leasing properties. By owning their stores, DMart gains greater control over space design and customization, allowing them to cater to specific customer needs in each location. Additionally, ownership eliminates the potential for rent increases or lease renewal challenges, providing long-term stability for their business operations
This recent land acquisition is not DMart's first foray into property ownership. In 2020, they made a significant investment by acquiring a 10-acre land parcel in Pune for an estimated INR 250 crore. This strategic move allowed them to build a large-scale distribution center, further streamlining their supply chain and logistics network. DMart's commitment to ownership extends beyond land; in 2019, they acquired a controlling stake in a cold chain logistics company, Venky's Imagine. This acquisition strengthened their cold storage infrastructure, ensuring the freshness and quality of perishable food items sold in their stores.
DMart's focus on ownership aligns with their aggressive expansion plans. The company recently opened a new store in Gujarat, adding to their already impressive network of 367 supermarkets across India. Their commitment to growth has been a key driver of their financial success. DMart reported a net profit of INR 2,536 crore in FY 24, fueled by their growing market share and efficient business model.
With a total retail business area exceeding 15.1 million sq ft, DMart is a dominant force in the Indian retail sector. Their focus on property ownership provides a competitive edge and positions them well for continued growth. It will be interesting to see if this ownership model proves successful and if it is adopted by other retail chains in the future. Will DMart's commitment to owning their space become the industry standard, or will leasing remain the dominant approach? Only time will tell, but DMart's bold strategy is certainly shaking things up in the Indian retail market.
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