Kirana stores face tough Diwali with 30% sales drop, quick commerce thrives

In India, approximately 13 million kirana stores form the backbone of FMCG distribution, especially in rural regions and Tier-II and Tier-III cities, accounting for nearly 85 per cent of sales

With the start of the festive season, urban kirana stores are bracing for a difficult Diwali. General trade distributors have reported a significant month-on-month decline in sales by 25-30 per cent since July, according to a report by The Economic Times.

 

This drop comes despite major fast-moving consumer goods (FMCG) companies in India experiencing a notable increase in quick commerce sales.

Shift in consumer behaviour

Some FMCG giants, including Dabur and Nestle, have indicated plans to adjust their inventory strategies in general trade to align with the evolving shopping habits of consumers in urban areas. Despite these changes, kirana stores continue to be the predominant sales channel for FMCG products.

   

The report quoted Suresh Narayanan, chairman of Nestle, as saying that the company’s e-commerce sales reached a seven-year high during the July-September period, with online sales now constituting 8.3 per cent of total domestic sales and quick commerce making up half of that figure.

Role of kirana stores in FMCG distribution

In India, around 13 million kirana stores serve as the backbone of FMCG distribution, particularly in rural areas and Tier-II and Tier-III cities, contributing nearly 85 per cent of sales. However, as per industry insiders, these traditional outlets are rapidly losing ground to quick commerce options in metropolitan regions, the report said.

 

The report quoted a representative from the All India Consumer Products Distributors Federation, which represents over 400,000 FMCG distributors, as saying that Diwali sales are not picking up for kirana stores, and there has been a 25-30 per cent month-on-month decline in sales for kiranas due to the presence of quick commerce platforms.

Quick commerce on the rise

Blinkit, Swiggy Instamart, Zepto, BBNow (Big Basket), and Flipkart Minutes have expanded their reach significantly in major cities, delivering groceries and essentials to customers within 10-12 minutes. This swift service has captured consumer attention and loyalty.

 

FMCG companies are strategically differentiating their product assortments based on pack sizes, consumer preferences, and pricing to balance the interests of kirana stores, quick commerce, and modern trade channels. However, the rivalry between kiranas and quick commerce has intensified in recent months.