Discounted to death: the silent slide of India's kirana shops

The Hindu

22-05-2025

A bottle of Pepsi for ₹50 and delivered in 10 minutes. For most urban Indians, that sounds like convenience. However, for the small family-run kirana store, once the lifeblood of everyday commerce, it sounds like extinction.
Vineet Kumar's shop has been a mainstay in Delhi's Malviya Nagar for over half a century, for most of which the 69-year-old has been at the helm. His trademark cooler, brimming with bottles of unbranded banta soda, remains a hit among regulars.
While he brushes off probing questions about business pressures, a steady stream of customers stops by to buy loose cigarettes, soft drinks, and candy.
'It's impacted me very little,' Kumar says of the yellow-jacketed 10-minute delivery agents criss-crossing the neighbourhood all day. 'From a business point of view, there has been a difference, but I'm satisfied,' he says.
Kumar estimates that around a tenth of his business has been affected, but he is still hopeful. 'We have milk and cigarettes, and we offer delivery,' he adds, highlighting the service and convenience he continues to provide over quick commerce platforms like Blinkit, Zepto, and Swiggy Instamart.
Just around the corner, Anuradha Taneja feels the blow more acutely. The 54-year-old, who has run her store for 25 years, says business is down by 30%. 'I used to have all these young students and working people who came to buy their supplies. Now they just sit at home and order, and it reaches them in10minutes,'she says.
Unlike some other kiranas, Taneja does not stock fresh vegetables, so casual grocery buyers are fewer. Instead, she depends more on passersby – a demographic that is increasingly vanishing.
To understand what exactly is under threat, it's important to define what a kirana store is. Simarjit Singh, Professor of Finance and Accounting at the Gurugram-based Great Lakes Institute of Management, describes it as a 'pureplay brick-and-mortar store that has created an inventory of daily household items', or fast-moving consumer goods (FMCG) 'that offer ease of access, credit, and free delivery for a limited period'. That model is now under intense pressure, particularly in India's tier-1 cities.
'Typically, the investment required to set up akiranastore ranges between ₹5 and ₹15 lakh, depending on the city,' Singh says, with much of that going towards renting space. About 65% of such stores operate out of rented premises, and monthly rents range from ₹5,000 to ₹1 lakh. 'These are generally middle-class people, bootstrapping their investment with help from family and friends,' he adds.
And it's a business that already runs on razor-thin margins. Any sustained drop in sales, like the kind being triggered by quick commerce platforms, can pose an existential threat. 'Ideally, rent should not exceed 20% of gross profit, or 3% of total sales turnover. That is the threshold,' Singh says.
'Taking away business'
Naresh Raghuvanshi, 41, runs a kirana store in Bhopal's Chuna Bhatti locality and has seen this threat materialise first-hand. He and his brother split a single shop after their respective marriages, turning half into a hardware outlet. 'My brother and I had rented this shop from a friend. We've relied on the residential societies nearby for years,' he says.
But now, he blames online platforms for 'taking away the businesses' of small shopkeepers. 'We can't match their prices and offers. It's not a fair competition. My business has been down at least 30-35% in the past two years,' he says.
Though Raghuvanshi still takes phone orders and delivers personally, rising rent, thinning margins, and fewer walk-ins have taken a toll. 'Even though it's my friend's shop, I have to pay rent. Many shopkeepers like me have shut their kirana shops and moved to other businesses,' he adds, voicing worry over how he will fund his daughter's college education next year.
Praveen Khandelwal, secretary general of the Confederation of All India Traders and now BJP MP for Central Delhi, has long decried the dominance of e-commerce giants and their impact on physical retailers. He argues that foreign-funded platforms use deep pockets to subsidise discounts that are impossible to match. 'Around 20% of mobile phone shops are shut in India,' Khandelwal told The Hindu.
While foreign direct investment rules bar e-commerce platforms from selling inventory they own, Khandelwal accuses them of circumventing the rules through local partnerships in the 'marketplace' model – indistinguishable in practice from selling their own goods.
Embracing change
Earlier, kiranas were largely protected from this because their low-ticket FMCG items weren't a priority for platforms like Amazon and Flipkart that focused on electronics and appliances. That changed with the advent of quick commerce, which is transforming how urban India shops, and is rapidly making its way into smaller towns.
To stay relevant, kirana shop owners are innovating. Kumar in Malviya Nagar offers delivery and credit, services still valued by older customers. Singh mentions one shop that diversified into toys to widen its customer base.
Urban retail is often run by those with some access to capital, giving them room to pivot. Taneja points to a nearby store that shut down last year and reopened as a hardware outlet.
But even relatively larger players are feeling the squeeze. Budget Bazaar, a grocery chain that opened an outlet in Malviya Nagar last July, ironically, in a space previously occupied by a Blinkit delivery hub, had to shut down within 10 months. 'It is very disheartening,' says Yash Goyal, a partner in the chain. He blames quick commerce platforms. 'They are killing us, because they are offering way more than what the customer expects — discounts and snappy delivery,' he says.
'A customer buying a bottle of Pepsi for ₹90 their whole life is suddenly getting it at ₹50. That's great, but I'm only getting that bottle for ₹85,' says Goyal. With little room to compete on pricing, he warns that if this trend continues, local stores may disappear altogether.
'There will be no nearby stores left to service you, and you will be bound to buy from these platforms,' he says, adding that then the prices will rise.
Even kiranas that stay afloat face steep operating costs. There's capital expenditure, rent or deposits, initial inventory, as well as labour. While some store owners rely on family, most still hire two or three workers.
'It costs somewhere around ₹7,000 to ₹15,000 per worker,' says Singh, a steep cost for a low-margin business trying to offer free delivery to keep up. 'Ultimately, quick commerce operators are not just killing the trade. They are killing the consumer spirit... 30% of the kirana business has already been taken away,' says Khandelwal.
In Bhopal, 23-year-old Tushar Singh runs a paan shop near the city's bustling No. 10 Market. After his father passed away in early 2022, Tushar took a gap year from school to manage his father's shop. 'Earlier, online stores didn't stock many of the brands I sell. They also used to shut by 11 p.m. But now they're open till 1 or 2 a.m.,' he says, adding that the change in timing has hit the core business of late-night customers.
'Markets in Bhopal shut by 10 or 11 p.m. People would come here, have tea, and sit with friends. They'd buy cigarettes from my shop. Now, many come with whole packets bought online,' Tushar explains.
To retain customers, he started offering discounted rates on some cigarette brands. 'I checked which items had margin I could spare, and reduced ₹5 or ₹10 on some brands,' he says, adding that while he sells almost the same number of packets, his earnings have dropped in the last year.
He and his younger brother are planning to buy a scooter and start home deliveries soon. 'Once my brother's school and my college get over, we will deliver to our regular customers,' he says.
Seeking govt. help
Goyal and Khandelwal both say government support is crucial. Singh, the finance professor,notes that in tier-2 and tier-3 cities, the dynamics may still favour kiranas, at least for now.
'There may be some merit to the argument that this is a tier-1 city problem. Zeptois still not profitable. They just received Series G funding,' he says, pointing to how the quick commerce model is still in a cash-burning phase. 'In tier-2 cities, kiranas still provide credit, have localised customer data, and are accessible. For four or five years, they may not suffer the same kind of displacement as in tier-1 cities,' he adds.
But if the quick commerce model entrenches itself further, and if deep-pocketed platforms keep bleeding money to dominate the market, then even those strongholds may not hold.
'We don't need anything in 10 minutes,' Khandelwal says, calling quick delivery a 'lure' that traps consumers. 'But now that they have created this narrative of 10 minutes, they are moving beyond FMCG products. They've gone into consumer durables, phones, and now white goods,' he adds.
For now, it is loyalty and goodwill that are keeping many kirana shops alive. 'But for how long will customers, out of the goodness of their heart, buy a product for ₹12 if it is available online for ₹10?' says Khandelwal.
(With inputs from Bhopal by Mehul Malpani)
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Edited by Mehraj Din Bhat