Intense Competition Forces DMart to Prune Seven Cities from Online Grocery Footprint; Core Retail Growth Slows

Intense Competition Forces DMart to Prune Seven Cities from Online Grocery Footprint; Core Retail Growth Slows​

Avenue Supermarts (DMart) is recalibrating its digital ambitions amidst fierce competition in India's quick commerce space. The retail giant has decided to scale back the operations of its online grocery platform, DMart Ready, discontinuing service in seven cities during the current quarter. This strategic move signals a measured shift away from rapid expansion toward focused profitability and efficiency as the market landscape is aggressively reshaped by delivery-focused rivals.

Vikram Dasu, Whole-time Director and CEO of Avenue E-Commerce Ltd., confirmed that the closures involved marginal contributors. As of June 30, 2026, the company operates in 11 cities following the rationalization effort. While the names of the cities exited were not disclosed, the pullback underscores the intense pressures reshaping the urban grocery market.

Navigating Quick Commerce Intensification​

The decision comes as established quick commerce players such as Blinkit, Swiggy Instamart, and Zepto continue their rapid expansion across urban centers. Unlike these fast-paced competitors that prioritize footprint expansion, DMart Ready has maintained a focused strategy based on scheduled deliveries and pickup services. The company continues to adhere strictly to the low-cost, everyday low-price model associated with traditional DMart stores.

The strategic focus shift at Avenue Supermarts is occurring while investor sentiment remains high within the rapid delivery segment. Billionaire investor Radhakishan Damani has recently increased his exposure to this sector, having acquired a stake in Eternal, the parent of Blinkit, through open market transactions. This investment highlights growing conviction among key investors toward quick commerce models.

Core Retail Business Shows Moderating Momentum​

While the online business is undergoing a strategic reset, DMart's core retail operations are displaying signs of slowing momentum in certain areas. The company reported that stores older than two years posted growth of 5.5 percent during the quarter, which was down from 7.1 percent recorded in the previous year. Growth at mature stores located in large metropolitan areas remained flat.

However, the performance profile remains mixed across the network. Non-metro locations continued to demonstrate solid operational performance. Overall, the company added three new stores during the reporting period, bringing its total store count to 503.

Financial Performance and Profitability Focus​

Avenue Supermarts reported a strong financial performance for the quarter ended June 30. Standalone revenue stood at Rs 18,343 crore, marking a substantial increase of 15.1 percent year-on-year. Furthermore, net profit rose by 12.8 percent, reaching Rs 936 crore.

The margins also saw slight improvements. The EBITDA margin improved marginally to 8.3 percent from the prior year's figure of 8.2 percent. This financial data suggests that the company is prioritizing operational efficiency and profitability even as it strategically reduces its online footprint in saturated markets.