Shoppers Stop Analysis

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Contents
Shopper’s Stop Analysis and Future Expected Returns (Investors Stop???)4
Shopper’s Stop6
Investors Returns in Shopper’s Stop in last 7 years since IPO-7
Madness of Investors and Liquidity Sloshing Around makes investors pay 70+ P/E for Shoppers Stop8
Shopper’s Stop Future Returns over Next Decade-Prediction8
Organized Retail Industry in India10
India Retail Landscape-Predictions and Reality11
How Much Cash Investment needed for Organized Retail to Become 20% of total Retail14
Investors and Shopper’s Stop16
Indian Household Monthly Per Capita Expenditure (2009-10)17
Basic Analysis of Retail Buying and Limits of its Growth18
People living in Homes18
Average Size of a House in USA, UK, India & Per Square Feet per person comparison18
The top spending youngest of the crowds do not live in their own homes20
Size of Fridge India20
Money with the People21
Ignore the nearby Local/Mom-n-Pop/Kirana Shops in favor of Shoppers Stop21
Advantage of Kirana/Mom-n-Pop Stores over Organized Retail/Shoppers Stop21
Basic Disadvantage/Advantage of Any retail remains same for Organized or Kiranas22
People travel to Retail Shop/Shoppers Stop or Buy Online23
Going to Mall24
Number of Cars per Person & Relation to Organized Retail24
Buying Online26
CD/DVD26
Books Retailing Online and Shoppers Stop Failure27
Electronics Sales Online29
People Choose the Stuff/Goods they Buy30
Food Expenditure comprises 50% of total spending by Indians30
Cereals and Pulses- 22% of total Expenditure31
Milk and Products – 10.88 % of total Expenditure32
Vegetables - 7.3%32
Sugar and Salt – 5.52%33
Beverages – 7.5%33
Egg, fish & meat and edible oil – 8.6%34
Fruits and Nuts – 2.29 % .35
Summary of Food Market Capturing Possibility35
Shoppers Stop low Food Sales as a % of Total Revenues36
Non-Food Expenses37
Durable goods- 7.03%37
On Electronics Category Mr. Biyani’s Thoughts.37
Mobile phones39
Clothing & bedding and Footwear– 7.56%39
2.46% of Expenditure on Tobacco Products can never be tapped by Shoppers Stop40
Miscellaneous Goods & Services – 28.33%40
Personal care and effects - 3.8%41
Household requisites – 5.6%41
Organized Retail Industry Market Penetration level in 2025-203042
Overall Summary (Food + Non-Food) Market Penetration in 2025-203042
Overall Summary Food Items Market Penetration in 2025-203043
Overall Summary Non-Food Items Market Penetration in 2025-203043
Shoppers Stop and Walmart Sales Mix Contrast45
People Buy the Stuff with Cash/Credit/Debit Cards45
Limit to Credit Card Penetration in India46
Consequence of Low Credit Card Penetration for Wal-Mart/Tesco/Reliance Retail and Indian Retailers in coming Decades46
Advantage Kirana46
People take goods purchased back to their Homes48
The Curse of Expansion- Low Return, Zero Free Cash Flow48
Charlie Munger on why Heavy Investments in Efficiency in Capital Intensive Business Don’t Reward Company49
Shoppers Stop/Organized Retailers on Inflation – Funny Read49
Pantaloons comments on Inflation-“it will increase trading density”49
Shoppers Stop comments on Inflation-“Magins and Inflation has no relationship on us”50
Shoppers Stop remarkable turning around of how Q4 will be better than Q351
Some Fun commentary from Annual Reports52
2006-07 Annual Report52
Misleading view on Depreciation52
Projections in Annual Report52
2007-08 Annual Report53
“Real estate costs for the Indian modern retailers are 8-20% of sales compared with 3-4% for retailers in other countries. “54
Annual Report 2008-0955
Annual Report 2009-1056
Annual Report 2010-1156
On margins in cosmetics57
In May 2012 Concall on High Interest Charges57
Conclusion58

Shopper’s Stop Analysis and Future Expected Returns (Investors Stop???)

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