Quick commerce led to closure of 200,000 kirana stores: Retailers' body

Recent data reveals, metro cities have experienced the greatest impact of quick commerce with 90,000 kirana stores shutting down in these areas alone, compared to 60,000 closures in Tier-I cities

The All India Consumer Products Distributors Federation (AICPDF) announced recently that quick commerce’s rapid growth in India has led to around 200,000 kirana stores shutting down over the past year, several media outlets reported. 

 

The federation noted that sales at kirana stores during this festive season have remained stagnant. India currently has approximately 13 million kirana stores, with over 10 million located in Tier-II and smaller cities.

 

According to federation data, metro cities have seen the highest impact from the rise of quick commerce, with 90,000 kirana stores closing in these areas alone. Currently, quick commerce operations are primarily concentrated in metro cities.

   

In addition, 60,000 stores have closed in Tier-I cities, with another 50,000 shutting down across Tier-II and Tier-III cities.

 

Dhairyashil Patil, National President of AICPDF, stated that quick commerce is reducing kirana stores’ customer base and profitability. He pointed out that deep discounting and alleged predatory pricing are creating a challenging environment for these traditional stores, which have been central to India’s retail sector for generations. 

 

Patil emphasised that these aggressive practices, compounded by the economic slowdown, are compelling many traditional retailers to close.

 

FMCG firms see demand uptick on q-com platforms

 

Recently, several consumer goods companies have observed an increase in demand for their products on quick commerce platforms, driven by changing customer preferences. A report by Financial Express on Monday indicated that direct-to-customer brands have reported up to 250 per cent higher festive sales on these platforms compared to the previous year.

 

The industry body added that customer visits to kirana stores have almost halved this year, compared to the past two to three years. They also noted that the pressure on kirana margins has intensified, as these stores struggle to match the discounts offered by quick commerce and online platforms.

 

PM Ganeshraam, chief patron of AICPDF, attributed nearly 200,000 kirana store closures nationwide to aggressive business tactics in the quick commerce sector, which prioritise short-term customer gains over sustainable practices.

 

The AICPDF has called for regulations on quick commerce in India to protect small retailers. Earlier this month, the federation sent a letter to the Competition Commission of India (CCI), urging an investigation into Zomato’s Blinkit, Swiggy, and Zepto for alleged predatory pricing. The letter asserted that such practices make it challenging for traditional retailers to compete or remain in business.

 

Tough Diwali for urban kirana stores

 

As the festive season unfolds, urban kirana stores are anticipating a difficult Diwali, with general trade distributors reporting a month-on-month sales decline of 25-30 per cent since July, according to The Economic Times. This decrease is occurring despite major fast-moving consumer goods (FMCG) companies in India reporting substantial growth in quick commerce sales.

 

Quick commerce is expanding rapidly in major cities, with platforms such as Blinkit, Swiggy Instamart, Zepto, BBNow (Big Basket), and Flipkart Minutes now delivering groceries and essentials to customers within 10-12 minutes, which has attracted significant consumer interest.

 

FMCG companies are adjusting their product offerings by pack sizes, pricing, and consumer preferences to balance kirana, quick commerce, and modern trade interests. However, competition between kiranas and quick commerce has been intensifying recently.