Avenue Supermart: a compounding machine?

I can’t comment about Dmart share price but here’s what I think Dmart as a business.

Dmart moat will increase with time & opening of new stores.

How?

Other than obvious reasons like purchasing power and bargaining power with supplier is directly proportional to number of stores, there are few more reasons -

1. Advertisement & promotional expense
   Dmart will need lesser advertisement expenses as brand become well known and spread evenly across India.
   This is similar to Bata or Good Day biscuits etc.
   How?
   Eg. Bata
   Since Bata has been presence for such a long time and it has always been been successful with core formal wear strategy, every time one thinks of formal footwear, Bata name cross the our mind.
   Similarly, since Dmart has been successful with almost all the category it has present, whenever anyone wants to purchase household items, the name Dmart will automatically appears.
   Now, I know Dmart don’t spend heavily on advertisement but initially they used to put hoarding and use very promotional schemes. Now with brand firmly place in customer mind, they don’t need to spend that money.

Also, once it enter new town, it will less far less time for store to operate at 100% or full efficiency as customer knows they get best value for money at Dmart and these is no 2nd guessing

This will ensure Dmart will be first choice for shopping whenever customer plans for shop
So it bounds to get higher share of customer wallet and thus even if reliance or any other 2nd player will get similar walking, avg bill value will be far lower (40% minimum)
Thus this will be like hybrid Toyota car which charges itself when running on petrol

Regarding growth -
Many members in forum has already mentioned that Dmart has barely scratched the surface and it has opportunity to spread all over India. So it has long way to go.

Growth will be slow and organic but will continue for longer time (10 to 25 years).
Problem will arises when existing store gets Olds (which require significant capital investment) / location get outdated (need to acquire land and build new store which will again require significant capital investment). This will be 20 years later as store avg life span is 20 years while building span is 35 to 40 years.