Pantaloon [Get Quote] Retail, the country's largest retailer, has seen its sales dip for the first time in four years, on subdued consumer sentiment and uncertain prospect of an economic revival. Reflecting the trend, the stock of the company fell 5.1 per cent to Rs 189.8, even as the Sensex rose 3.3 per cent.

Pantaloon shares have dropped 24 per cent since January 7.

The same-store sales in December in the value retail segment, led by Big Bazaar and Food Bazaar formats, fell 4 per cent. The decline indicates that consumers are buying less of items that are discretionary.

Overall, same-store sales of Pantaloon's lifestyle retail segment dropped 14 per cent and home retail 10 per cent, according to information released by the company.

Same-store sales, a common metric in the retail industry, compares sales of stores that have been in the business for a year or more. This measure allows investors to determine what portion of new sales has come from sales growth and what portion from opening new stores. The figures are usually released by retail companies every month.

When contacted, Kishore Biyani, managing director, Pantaloon Retail, said even he was surprised, "but these are unpredictable times". He, however, said that the January sales will be in double digits as they have already grown 18 per cent in the first few days of the year. The company owns Food Bazaar, Big Bazaar, Pantaloon, Central, E-zone and Home Town formats.

"While most of our lines of business like fashion, food and general merchandise have registered a good growth in same-store sales, there have been two or three categories like mobile handsets, electronics and furniture that have shown some sluggishness. This was witnessed in our value formats like Big Bazaar as well as our home concepts," Biyani explained.

Sales in the lifestyle segment have taken a hit because some high-value international brands sold from the stores did not do well. Biyani's stores sell international brands like Etaam, Lee Cooper, among others.

Analysts were also surprised. "I was not expecting value retail sales to fall. It is probably a reflection of what is happening to the economy," said Purnendu Kumar, associate vice-president, Technopak.

Slower same-store sale growth also indicates the increasing pressure on margins, which Biyani disputes. He says his private labels are selling well and the January sales have gone up, even in the lifestyle segment.

Slowing sales and an uncertain future are also forcing Pantaloon Retail to delay expansion this year. Pantaloon has added a mere 0.1 million square feet of store area in December, taking the total addition for the first half of the fiscal to 0.8 million square feet.

It will need to add 0.53 million square feet every month for the rest of the year to meet its target, Bank of America Merill Lynch said in a report released today.

"The expansion plan, which we are confident we will achieve before June or July this year, includes 15 Big Bazaars, 5 Centrals, 3 Home Towns, 10 E-zones, 1 Ethnicity and 4 Pantaloon stores," said Biyani. He admitted that the company will fall short by at least 1 million square feet of its target to add 4 million square feet of retail space by the end of this fiscal. An official in Biyani's office added that the retail chain was facing delays owing to slower construction of malls and the fact that malls were deferring their opening because of retailers going slow on opening stores. An official in Biyani's office added that the retail chain was facing delays owing to slower construction of malls and the fact that malls were deferring their opening because of retailers going slow on opening stores.