Retail Sees Dark Stores in Good Light

Time of India

18-05-2025

Chains such as Reliance Retail, More and Spencer's have started to open standalone dark stores to match the speed of their online competitors, company executives said. They had initially resisted the quick commerce model.
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Chains such as Reliance Retail , More and Spencer's have started to open standalone dark stores to match the speed of their online competitors, company executives said. They had initially resisted the quick commerce model.Quick commerce platforms such as Blinkit, Swiggy Instamart, Zepto and BigBasket have eaten into the share of kiranas and retail chains in the top eight to 10 cities, as consumers seek instant gratification of what was their monthly grocery shopping.Dark stores are mini warehouses that typically serve a 2-3 km radius, allowing faster deliveries of online orders.Dinesh Taluja, chief financial officer at Reliance Retail, recently told analysts that while the retailer wants to deliver online orders in less than 30 minutes, it has started to set up dark stores in 'some dark pockets' where there's enough volume and which cannot be serviced from its store network in this timeline. He said the country's largest retailer is at present using its 2,000-odd stores to deliver within a 3-km radius, covering 4,000 pin codes.Vinod Nambiar, managing director of More Retail, said the company has just set up 45 dark stores, with 100 more in the pipeline. It has set up some of these in New Delhi.The Amazon-Samara Capital owned retail chain has exited its brick-and-mortar operations in the Capital. It is exploring Mumbai too, where it has no operations currently.Nambiar said a dark store is viable in high-demand micro markets —with high population density and many high-rises —provided the rent is manageable. 'There are standalone dark stores in cities where we have no operations, while in cities where we have stores —such as Kolkata, Hyderabad, Bengaluru and Cochin — we will convert a hybrid store (which does both store and online business) into a dark store as the market matures into online,' said Nambiar.More is the largest preferred seller in Amazon's food and grocery business,The Amazon-Samara Capital-owned retail chain has exited its brick-and-mortar operations in Delhi. It is eyeing Mumbai too, where it has no operations currently.Nambiar said a dark store is viable in high-demand micro markets—with high population density and many high-rises—provided the rent is manageable. 'There are standalone dark stores in cities where we have no operations, while in cities where we have stores—such as Kolkata, Hyderabad, Bengaluru and Cochin—we will convert a hybrid store (which does both store and online business) into a dark store as the market matures into online,' said Nambiar.More is the largest preferred seller in Amazon's food and grocery business, Amazon Fresh, in India.NielsenIQ, FMCG market researcher, in its report for January-March, said there was a shift towards ecommerce in metros, with high shopping engagement impacting share of modern trade and kiranas.NielsenIQ figures show the growth of ecommerce was largely volume-driven — up 40% compared to a 2.2% fall in traditional trade growth rate and 7.7% decline in modern trade. The researcher said this was supported by increasing online shopper penetration, more purchase occasions and increasing basket sizes, or more units purchased per shopper.Spencer's Retail chief executive Anuj Singh told analysts on Friday that though dark stores are not a focus area, it has piloted one in Kolkata, where it felt the store reach was not sufficient for a 30-minute delivery. He said the company's quick commerce service currently processes 1.7 lakh bills per month, which it wants to take up to three lakh per month in this fiscal, with expansion into markets such as Lucknow and Varanasi.