Avenue Supermarts has reduced its DMart Ready online grocery presence to 11 cities from 24, exiting several markets to focus on profitability. The move comes as quick commerce rivals like Blinkit and Zepto gain significant market share in the grocery segment. Investors will monitor whether this strategic consolidation can lower losses while defending the company's core business model.
Avenue Supermarts, the operator of the popular DMart retail chain, is sharply reducing the footprint of its online grocery business, DMart Ready. Over the last year, the company has cut its operational cities by more than half, dropping from 24 cities to 11. This decision reflects a shift in strategy, prioritizing operational efficiency and profitability over the rapid geographic expansion seen in previous years.
Strategic Exit from Marginal Markets
In the first quarter of fiscal year 2027, DMart Ready exited seven cities, including Jaipur, Surat, Nasik, Kolhapur, Chennai, Vijayawada, and Raipur. Company management identified these locations as marginal contributors, meaning they were not generating enough business to justify the operational costs. By pulling out of these regions, the company aims to concentrate its resources on deep-penetration strategies within major metropolitan hubs where its existing physical store network and supply chain infrastructure are already well-established.
This consolidation is a direct response to the intense pressure created by the rise of quick commerce players such as Blinkit, Swiggy Instamart, and Zepto. These platforms have fundamentally changed consumer expectations by offering ultra-fast, 10-20 minute grocery deliveries. In contrast, the DMart Ready model is built around scheduled deliveries, dedicated pick-up points, and a focus on bulk purchasing, which aligns with the company’s signature Everyday Low Price (EDLP) strategy.
Financial Performance and Competitive Pressure
Despite steady revenue growth, the e-commerce division has faced persistent financial challenges. For the fiscal year ending March 2025, DMart Ready reported a revenue of Rs 3,502.42 crore, up from Rs 2,899.20 crore in the previous year. However, the division’s losses also expanded, rising to Rs 247.37 crore from Rs 184.82 crore in fiscal year 2024. This trend of widening losses, even as the business grows, has pushed management to reassess its strategy.
Market analysts note that while the company is attempting to improve its unit economics by exiting smaller markets, it remains in a difficult position. The major metropolitan areas, which are now the primary focus for DMart Ready, are also the most aggressively contested markets for quick commerce firms. While the company’s offline store network remains a strong competitive advantage, the long-term impact on revenue growth will depend on whether this refined focus can effectively convert offline shoppers to its online platform without incurring unsustainable customer acquisition costs.
Investors should track the company’s upcoming quarterly results for signs of improved margins within the e-commerce arm. The key monitorable will be whether the reduction in operating cities leads to a narrowing of losses in the coming quarters and if the company can maintain its competitive edge in dense urban markets against platforms that prioritize speed over bulk-buy discounts.