Quick Commerce Upending Indian Retail as DMart Struggles To Adapt
Avenue Supermarts, the parent company of DMart and a dominant force in India’s brick-and-mortar retail sector, ended Monday down 8.35% as it faces unexpected headwinds from quick commerce and online grocery platforms.
The company’s management has acknowledged that online grocery formats are impacting performance in their large metropolitan stores, which have historically been high-revenue generators. This admission marks a departure from their previous stance, which had largely dismissed the potential threat from digital competitors.
Quick commerce players, characterized by their rapid expansion strategies and growing product portfolios, have been steadily gaining market share. Firms such as Swiggy Instamart and Blinkit have consistently improved their SKU availability relative to DMart’s online offering, DMart Ready.

While DMart has made efforts to establish an online presence through DMart Ready, now operational in 24 cities, its digital growth rate of 21.8% in the first half of the fiscal year appears modest compared to the rapid expansion of pure-play e-commerce and quick commerce operators. This discrepancy in growth rates highlights the challenges faced by traditional retailers in adapting to the digital retail environment.
The company’s cautious approach to online expansion is further compounded by a deceleration in its physical store growth. DMart added six stores in the second quarter, consistent with historical averages but potentially insufficient given the intensifying digital competition.
Morgan Stanley’s analysis suggests that DMart’s slower response to market changes towards convenience is beginning to impact its business model. “We believe Quick Commerce players are expanding cities, categories, SKUs, AOVs and discounts, and creating parallel commerce for convenience-seeking customers. SKU availability on Quick Commerce platforms, as a percentage of SKU availability on DMart Ready, continues to improve across Quick Commerce players. Hence, Quick Commerce players seem to be narrowing the gap,” they wrote in a note to their clients Monday.
Goldman Sachs on Monday put a sell rating on Avenue Supermarts, cautioning to their clients:
The rapid scale up of Q-commerce players likely to continue, impacting Avenue going ahead as well: The rapid scale up of online grocery quick commerce players like Blinkit in the top 8 cities in India is adversely impacting Avenue’s SSSG in these cities, as more consumers move to online quick commerce from offline retail. As per Zomato’s guidance, the company targets reaching 2,000 dark stores for Blinkit by end CY26, compared with 526 dark stores at the end of FY24. We thus expect this pressure to continue for Avenue in the near term.
Bernstein analysts said Monday in a note to clients that the quantum and speed of impact from quick commerce firms had “surprised” the investment bank. But noted that one quarter’s results “does not indicate a shift in DMart’s long-term story.”
“Store opening potential remains high in new & existing clusters. We believe value seeking customers will remain the primary purchase driver for a large part of India — which DMart excels at. But, we also acknowledge that growth may continue to come under pressure in the short term,” they added.