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The food and grocery retail segment, including staples, beverages, snacks, and packaged food items, was valued at over US$660 billion, contributing 55 percent to the total retail sales in India. Organized offline retailers are facing stronger competition from quick-commerce entities delivering groceries in minutes.
While both models are expected to co-exist, offline retailers continue to hold sway as they cater to customers for their larger weekly or monthly grocery shopping, as opposed to quick commerce, which typically caters to smaller, unplanned purchases. More than 60% of retailers have adopted digital payments at their stores for ease of payment and a hassle-free buying experience for their customers.
Operating margin is expected to remain largely stable this fiscal, as grocery retailers pass on the sharp increase in the price of goods and continue with cost-optimisation measures. It is expected that the grocery retail market in India will reach approximately $1.10 trillion by the year 2030. The traditional “kirana” stores dominate the Grocery market , covering 90% of the market with more than 12 million stores.
Another significant trend that has emerged is large retailers (Reliance 7-Eleven stores, Tata Fresho stores, D-Mart and many more) collaborating with local kirana stores to help manage efficient delivery and expand their networks. The future growth of the grocery segment in India is likely to come both from semiurban (Tier 2 and Tier 3 cities) and rural areas, and people in these area prefer offline shopping for groceries over online.
With a rapid pace of urbanization, emerging cities and semiurban areas are likely to witness an increase in monetary value of consumption of grocery items (value growth). Rural areas, however, are likely to witness an increase in quantity of consumption (volume growth)
The Indian retail industry has significantly evolved with time. The growth trajectory of organized Indian retail is marked by certain significant increases in Grocery consumption. Grocery consumption amounts to half the total of the country’s retail consumption and offline holds the majority of the stake in the market.
In 2010, the Indian community was skeptical about the survival of kirana stores because of the emergence of supermarkets/hypermarkets. However, more than a decade later, kirana and small stores are surviving due to the service specialty involving personal touch, monthly credit and proximity to the consumers. Organized grocery retail in India is highly competitive, with a few big players trying to lure consumers with lucrative offers.
They want to give consumers a unique experience of shopping with properly stocked shelves and a neat and tidy, well-lit space with a variety of products to stimulate the consumers to purchase them.
The supermarket format is the most prevalent in Indian markets, which is estimated to be around 49%, followed by convenience stores (43%) and hypermarkets (8%) in 2021. In 2021, the number of modern grocery retail outlets increased to more than 8,000, but this number is quite small compared with traditional grocery retailers (kirana stores and corner shops), which amount to around 12.8 million stores
The Offline Grocery Market In India is accounted for $XX Billion in 2023 and is anticipated to reach $XX Billion by 2030, registering a CAGR of XX% from 2024 to 2030.
Organized Grocery Retail. Organized grocery retail in India is highly competitive, with a few big players trying to lure consumers with lucrative offers. They want to give consumers a unique experience of shopping with properly stocked shelves and a neat and tidy, well-lit space with a variety of products to stimulate the consumers to purchase them.
Traditional (Unorganized) Grocery Retail. Traditional grocery retail stores are the largest segment, with around 12.8 million stores. The size of traditional grocery stores varies from 100 to 1,000 square feet – most of these stores measure less than 500 square feet. The customization of local preference by the traditional grocer is their greatest strength, apart from personalized care, credit facility and home delivery provided to the consumers
