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

The company discontinued e-commerce pick-up and delivery services in Amritsar, Belagavi, Bhilai, Chandigarh, and Ghaziabad, it said in its earnings release this month.

The Ready sub-brand allows customers to order online and collect groceries from a pick-up point or delivers to home in six hours.

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

This isn’t the first time DMart has scaled back its Ready footprint, however.

At the end of March 2023, the retailer had 573 DMart Ready stores. Over the next 12 months, it shut 232 outlets—more than 40% of its network—ending fiscal 2024 with 341 stores. It did not disclose its current store count. Last quarter, DMart Ready operated in 24 cities, which following the latest exits is down to 19.

Avenue Supermarts, DMart’s parent firm, did not respond to an email from Mint seeking comments.

Analysts tracking the company say DMart is up against formidable competition from quick commerce.

“We note there are 100+ cities already where one or more QC (quick commerce) companies are present and where no DMart stores are present, indicating fast-paced expansion of QC companies into tier 2/3 cities, thus causing more competition for DMart," equities brokerage firm Kotak Institutional Equities said in a note dated 24 June.

Profit problem

Sales of Avenue E-commerce Ltd, the subsidiary that houses DMart Ready, have been growing. But so have losses. The company reported annual revenue of ₹3,502 crore in fiscal 2025, up more than 20% year on year. However, losses also expanded by more than 33% to ₹247.37 crore this past fiscal. Avenue Supermarts does not report quarterly financials for its subsidiaries.

Brokerage firm Nuvama Institutional Equities, however, estimated that DMart Ready’s topline grew by 16% in the September quarter, lower than the 25% growth rate the same time last year.

The e-commerce subsidiary is growing its losses as customers shift to home delivery from order-and-pick-up purchases. “The widening loss in subsidiaries (the difference between consolidated and standalone DMart figures) appears to stem from a higher proportion of ‘delivery sales’ compared with ‘pickup sales’," read the Nuvama note.

Sandeep Abhange, equity research analyst at LKP Securities, said the primary reason for DMart Ready’s recent closures was a lack of profitability in smaller markets. “In cities like Chandigarh, the stores were not that profitable," he said, adding that DMart’s goal has always been to “remain profitable, unlike quick commerce players that can afford losses initially". He noted the company prefers to “get out of those areas where they are not able to make those stores profitable."

Abhange also pointed to competition from quick commerce players and slower delivery times as pain points.

“Customers are now used to 10- or 12-minute delivery," he said. “DMart Ready is still striving to maintain this kind of six-hour delivery. Due to that, no one will opt for that kind of model." He added that DMart Ready has “lost a lot of growth" as quick commerce platforms are “taking market share," and that its earlier pick-up model—where customers “had to go and collect their essentials"—was another deterrent.

Read more: Inventory wars: Swiggy and Blinkit stock up quick commerce race

DMart Ready's exit from five cities comes at a time that quick commerce companies including Eternal Ltd’s Blinkit and Swiggy Instamart are rapidly expanding into tier-II and tier-III cities across India. In the June 2025 quarter, Eternal said it opened 243 new Blinkit dark stores and is set to expand to 2,000 by this December.

Even though India's top 20 cities make for the majority of Blinkit’s business, “the smaller cities are equally promising as far as profitability is concerned," the company said in a shareholders’ letter this July. “The difference in Net AOV [net average order value] of our large and small cities is fairly narrow at ~10%. Hence, after accounting for lower cost of operations in smaller cities, there is early evidence that margins will be attractive even in smaller cities."

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