All India Consumer Products Distributors Federation (AICPDF), a body that represents FMCG distributors in the country, has claimed that an estimated 2 lakh Kirana stores have shut down in the last year, due to the rapid expansion of quick commerce along with the economic slowdown. The industry body has alleged that quick commerce players are creating an “unfair playing field” through deep discounting, combined with predatory pricing, eroding the customer base and profitability of Kirana stores. This, along with the economic slowdown, has led to the closures of Kirana stores, it added. 

This comes at a time when AICPDF has written to government authorities, including Competition Commission of India, to investigate the business models of quick commerce players. 

The industry body said that Kirana stores in metros have seen the most impact. “This unsettling trend has seen its greatest impact in metropolitan areas, which account for 45 per cent of the shutdowns, followed by Tier 1 cities (30 per cent) and Tier 2/3 cities (25 per cent). The growing presence of quick commerce, compounded by economic challenges, has contributed to this trend, as Kirana stores across all regions struggle to stay afloat,” AICPDF stated. 

“Quick commerce, a sector generating approximately $3.3 bn in revenue, has primarily targeted metro markets, where these closures are most concentrated,” stated Dhairyashil Patil, National President of AICPDF. “This rapid expansion is eroding the customer base and profitability of Kirana stores that have served as the backbone of India’s retail sector for decades,” he added. 

“Deep discounting, combined with predatory pricing, has created an unfair playing field, eroding the customer base and profitability of Kirana stores that have anchored our retail landscape for generations,” Patil added. He said these aggressive practices, “coupled with the economic slowdown, are forcing many traditional retailers to shut stores.”

The industry body said that its analysis has revealed that Kirana stores are facing economic pressures from various fronts. Kirana stores are coping with a drastic reduction in consumer footfalls that has halved compared to 2-3 years ago. With 65 per cent of these stores operating from rented premises, rental costs are also making it increasingly difficult to break even amidst the decline in consumer spending. 

“Despite the festive season with major events like Dussehra and Diwali, sales remain stagnant. The festive boost, usually seen at this time, has yet to materialise, with Diwali set to start on October 28,” AICPDF stated. 

India has about 13 million Kirana stores nationwide. Metropolitan cities account for 1.7 million, Tier 1 cities hold 1.2 million, and Tier 2 cities and beyond comprise 10.1 million stores.

The body claimed that about 90,000 stores in metro cities, 60,000 in Tier 1, and 50,000 in Tier 2/3 cities have shut down. This sector is essential to India’s economy, contributing over 15 per cent of the GDP and providing employment to nearly 8 per cent of the workforce. The body stressed that Kirana stores were thriving despite growing competition from supermarkets, but quick commerce poses new pressures as it has led to a reduction in profit margins and a shift in consumer preferences towards shopping online for convenience.

P M Ganeshraam, chief patron of AICPDF, said, “These aggressive practices, which prioritise short-term customer gains over sustainable business practices, are directly responsible for the closure of nearly 200,000 Kirana stores across the country.”

AICPDF has urged urgent intervention from policymakers to support Kirana stores as they face unprecedented challenges. “Steps to regulate the quick commerce industry and create protections for small retailers are essential to preserve the heritage and economic role of India’s traditional retail sector,” it added. 

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