DMart bets on tech, execution for next growth phase

In his first year at the helm of Avenue Supermarts Ltd, which runs India’s largest supermarket chain DMart, Anshul Asawa has outlined a road map for growth centred on technology, execution and organizational capabilities, while retaining the low-cost retail philosophy championed by billionaire founder Radhakishan Damani.

At the annual investor meeting on Tuesday, Asawa said DMart’s next phase of growth would focus on modernizing its technology and data infrastructure, strengthening management bandwidth to support a larger store network and building a sustainable e-commerce business before expanding its online footprint.

The comments marked the clearest indication yet of how Asawa plans to steer the retailer after succeeding long-time chief executive Neville Noronha earlier this year.

While Noronha spent over a decade refining DMart’s everyday low-price model through disciplined expansion and operational efficiency, Asawa’s focus is on building the systems and capabilities required to scale the business further.

The strategy comes as DMart faces increasing competition from quick-commerce platforms in its core metro markets.

Its consolidated revenue rose 14.9% year-on-year to ₹18,794.5 crore in the June quarter, while net profit increased 11.3% to ₹860.4 crore. However, growth in mature stores slowed to 5.5% from 10.8% in the previous quarter, as metro store productivity came under pressure from rapid-grocery delivery players.

Asawa, who spent the past year visiting stores, distribution centres and interacting with employees, vendors and customers during the leadership transition, said DMart’s core model would remain unchanged.

“The fundamentals of this business are rock solid. The model of providing everyday low prices through an everyday low-cost operation is not just a strategy, but it has become our moat and will continue to protect us for years to come,” he said.

Asawa said organized retail still has significant headroom for growth despite the rise of quick commerce, adding that DMart’s long-term focus would remain on serving customers through its physical store network.

As the retailer crossed the 500-store milestone, ending the June quarter with 503 outlets, Asawa said execution would be the company’s biggest priority.

“DMart is all about execution, plain and simple. To support a much bigger footprint, we will be investing heavily in building management bandwidth and capabilities across all levels of the organisation,” he said.

The management reiterated its ambition to add stores at around 15% annually, with the potential to move towards 20% depending on land availability and execution.

To accelerate expansion in land-constrained markets such as the National Capital Region, the retailer said it is increasingly open to long-term leases. Of its 503 stores, 68 operate under long-term lease agreements, including 15 of the 85 stores added over the past year.

Shares of Avenue Supermarts fell over 6% on Tuesday, their steepest single-day decline since October 2024, after the expansion outlook disappointed investors. The company’s 15% annual store-addition target implies around 75 new outlets from the current base, below some analysts’ expectations of 80-100 stores per year.

Shares of Avenue Supermarts Ltd closed 4.3% lower at ₹3,847.45 on BSE.

Technology will be a key pillar of Asawa’s strategy. He said DMart will upgrade its technology and data stack to improve merchandising, category management and store operations.

“One big strategy for me will be modernising our technology and data stack. We will be upgrading key systems so that we can run tighter operations and use our data much more effectively across our categories, store operations and merchandising,” he said.

The technology push also extends to DMart Ready, where the retailer plans to prioritize profitability over rapid expansion. After exiting seven cities during the June quarter, the online grocery business will remain focused on 11 cities that contribute the bulk of its sales.

“We want our team to be laser-focused on proving that we can run a truly sustainable, profitable e-commerce model here,” Asawa said.

The immediate priorities for DMart Ready include improving assortment, simplifying the digital shopping experience, reducing delivery timelines to under six hours and improving profitability before entering new markets. The business currently operates around 160 pickup points.

The cautious approach reflects a more competitive grocery landscape, with Blinkit, Zepto, Swiggy Instamart, Amazon and Flipkart expanding rapidly in metro markets. DMart acknowledged that quick commerce is increasingly capturing smaller, convenience-led purchases, particularly in cities such as Mumbai and Bengaluru, but said it has not seen a meaningful impact on larger monthly household stock-up purchases.

Beyond technology and expansion, Asawa said DMart’s merchandise strategy would remain unchanged. The retailer will continue investing in private labels while maintaining its focus on offering around a 20% price discount, targeting a 20% gross margin and aiming for nearly a 20% volume share.

“While organised retail still has significant headroom for growth, the increasing penetration of quick commerce could keep like-for-like sales growth under pressure over the longer term,” said Karan Taurani, executive vice president at Elara Capital.