DMart eyes higher margins via private labels as quick commerce grows
This movement reflects a wider tendency in the value retail where special labels are increasingly used to increase the affordable prices and maintain margins. Special tags are usually sold in -house brands at lower prices and are owned and sold only by a retailer.
“Fast -moving consumer goods (FMCG) companies are expanding the product lines and are called new things like Hul reduces palm oil and came together with a pharmaceutical company for a new recipe,” he said.
Dmart’s rival Tata Trent Star Bazaar created a successful special label category with more than twice revenue. La1.798 Crore in FY23 La2,699 Crore in FY25. In the categories where special labels are offered, they contribute to more than 70% of sales two years ago.
Vishal Mega Mart, who has a strong presence in the cities of Seviye-II and Tier-III, reported the income of income. La10.716.3 Crore in FY25. Although the company does not disrupt the label contribution to its financial situations, industry estimates show that 65-70% of its sales come from in-house brands in clothes, shoes and general products.
DMART has begun to expand its special labels in categories such as “Star Bright”, “Glossy” and “Biskky Bite”, which compete with similar product lines from some of the country’s largest fast -moving consumer goods (FMCG) players.
Posts sent to DMART did not respond until the press time.
According to a Kotak corporate stock report written by Garima Mishra and Ishaini Swain on June 23rd, “DMART is trying to increase gross margins by adding special labels to more categories (HPC, Foods).
Special Tags
According to the report, these special tags are now occupying 20-30% of the shelf area in certain product categories at DMart Outputs. Retaraneci limited special labels to the basic product category under the “Premia” brand, which was initiated in 2002.
According to the report, these special tags are about 30-70% lower than some branded FMCG products. This underlines the vision of selling the retailer’s daily products to Indian consumers at “daily low prices”. For example, special label detergent, star bright, costs La72 per kg, tidal costs of P&G La125 per kg. La34 Parle compared to agro’s froti.
Founded in 2000 by billionaire Radhakishan Damani, Dmart opened its first store in Powai, Mumbai in 2002. Today, India’s largest retail chain, market value, is the largest retail chain of India. La2.8 trillion. The company opened to the public in 2017 and increased its success by continuously offering low prices. DMART is usually paid to wholesalers in front of industrial payment cycles and provides deeper discounts to consumers.
The company is currently wandering during a transition phase and faces twin difficulties: a change in leadership and intensifies the competition from Quick Commerce players.. Neville Noronha, CEO for a long time, has been expected to resign until 2026. Anshul will be fulfilled by ASAWA. Mumbai -based analyst, “Considering the high criterion of Noronha, ASEWA may have a significant difficulty in front of us,” he said.
The aggressive push of the retailer’s special labels is overlapping with the rapid rise of fast trade players such as Swiggy’s Instamart and Zepto in several cities, especially in the cities of Tier-II and Tier-III, which are the limited assets of the DMART. According to the Kotak report, there are more than 100 cities where one or more fast trade platform exists, but there is no DMART.
“Fast trade leaves Dmart Ready, who works more like a traditional e-commerce with one to two-day delivery. On the contrary, fast trade players deliver the players in a few minutes.” He said.
Increasing scope
While DMART currently has stores in 152 cities, it is ignored in 194 cities, it watches Instamart and Zepto in 116 and 73 cities. “In the urban and metro markets, DMART has high penetration, but there are even places where I think DMART, Q-mermerce may continue to reach, so ‘Ambite’.
Despite its value, DMART’s profitability has been difficult in recent years. According to the company’s FY25 Financials, the company’s EBITDA margin, which has a profitability measure of business performance, fell from 8.5%to 7.6%in 23 fiscal years, even if gross margins remained constant by 14.8%.
The Analyst said that the main reason for this decline stems from increasing costs, ”he said. The employee cost is now 6% of revenues from 5.4% two years ago.
“Special labels tend to be cheaper, and if consumers are satisfied with the quality of the products, the expansion will deepen. “In the long run, this can affect the margins of some branded FMCG goods.”
Special label push is also supported by DMART’s ongoing store expansion. According to the Kotak report on June 23, 2025, the DMART added 50 stores in FY25 and plans to open about 75 new stores in the next three years. States such as Uttar Pradesh and Odisha are expected to have key focus areas. The company recently entered Agra and pointed to its first expansion to the state beyond Ghaziabad. The company watched an income La59,358 FY25’de an increase of 16.9% in the previous financial year. The company’s net profit increased by 6.7% La2,536 Crore in 24 FY24 La2,707 Crore in FY25.
“Special labels not only heal margins, but also offer more options for a price group, Pra said Prajapati,” Prajapati said. “If customers are satisfied with quality, they will be connected to the brand over time.”
“As we accept, we already see income pressure on traditional FMCG brands. Brand cannibalism will probably continue as the competition intensifies,” he said.
