DMart Ready pivots towards metros as quick commerce forces it to wind up in five tier-II cities

The company said in its earnings call this month that it has discontinued its e-commerce pickup and delivery services in Amritsar, Belagavi, Bhilai, Chandigarh and Ghaziabad.

The Ready sub-brand allows customers to order online and collect food from a pickup location or have it delivered to their home within six hours.

DMart has been trying to get its e-commerce model right for several years. Earlier this year, CEO Neville Noronha said on an analyst call that home deliveries were beginning to outpace pickup point sales for the firm, adding that delivery volumes now “far exceed” those from pickup stores.

But this isn’t the first time DMart has shrunk its Ready footprint.

At the end of March 2023, the retailer had 573 DMart Ready stores. Over the next 12 months, it closed 232 outlets, more than 40% of its network, ending fiscal 2024 with 341 stores. It did not disclose the number of existing stores. Last quarter, DMart Ready operated in 24 cities, and with the latest exits, that number has dropped to 19.

DMart’s parent company, Avenue Supermarts, did not respond to the email. Mint We are looking for comments.

Analysts who follow the company say DMart faces tough competition from fast-paced commerce.

“We note that there are currently more than 100 cities with one or more QC (quick trading) companies and no DMart stores, indicating that QC companies are rapidly expanding across 2/3 cities, thus causing more competition for DMart,” stock brokerage firm Kotak Institutional Equities said in a June 24 note. he said.

profit problem

Sales of Avenue E-commerce Ltd, the subsidiary that houses DMart Ready, are on the rise. But there are also losses. The company announced its annual income ₹3,502 crore in FY2025, up 20% year-on-year. But losses also increased by more than 33%. ₹247.37 crore in the last financial year. Avenue Supermarts does not report quarterly financial statements for its subsidiaries.

But brokerage firm Nuvama Institutional Equities estimated DMart Ready’s revenue grew 16% in the September quarter, below the 25% growth rate in the same period last year.

The e-commerce subsidiary has been widening its losses as customers shift from ordering and pickup to home delivery. “The increased loss on subsidiaries (the difference between consolidated and standalone DMart figures) appears to be driven by a higher proportion of ‘delivered sales’ compared to ‘delivered sales,'” the Nuvama note read.

Sandeep Abhange, equity research analyst at LKP Securities, said the main reason for DMart Ready’s recent closure was lack of profitability in smaller markets. “In cities like Chandigarh, stores were not that profitable,” he said, adding that DMart’s aim was always to “stay profitable, unlike flash trade players who were able to absorb losses initially”. He noted that the company prefers to “get out of areas where they can’t make stores profitable.”

Abhange also pointed out competition from fast-track players and slow delivery times as pain points.

“Customers are now used to 10- or 12-minute delivery,” he said. “DMart Ready is still struggling to maintain this type of six-hour delivery. So no one will opt for this type of model.” He added that DMart Ready had “lost a lot of growth” as flash commerce platforms “took market share” and that the previous pickup model, where customers “had to go and pick up essentials,” was another deterrent.

Read more: Inventory wars: Swiggy and Blinkit stock flash commerce race

DMart Ready’s exit from five cities has seen flash commerce companies like Eternal Ltd’s Blinkit and Swiggy Instamart rapidly expand into World War II across India. and III. It took place at a time when the Tier 1 was expanding into cities. Eternal said it opened 243 new Blinkit dark stores in the June 2025 quarter, and that number is planned to grow to 2,000 by this December.

While India’s top 20 cities account for the majority of Blinkit’s business, the company noted in a letter to shareholders this July that “smaller cities are equally promising when it comes to profitability.” “Difference in net AOV [net average order value] 10% of our cities, large and small, are quite narrow. “There is therefore early evidence that margins will be attractive even in smaller cities, once lower operating costs in smaller cities are taken into account.”

Swiggy said in an earnings release that it will focus on growing Instamart in the 127 cities it is already present in before planning to expand into more markets.