Top Indian retailers ramp up hiring, defying urban slump

Mint

20 hours ago

Mumbai: After a lull, top Indian retailers have resumed large-scale hiring. This time, it's driven by India's small cities and towns, even as urban demand has yet to climb out of a slump.
The four largest listed retailers–Reliance Retail Ltd (part of Reliance Industries Ltd), D'Mart operator Avenue Supermarts Ltd, Titan Co. and Trent Ltd–together added 46,000 employees in fiscal 2024-25, according to their annual reports. :Just a year ago, the sector saw layoffs and hiring freezes as companies shut unprofitable large outlets.
However, over the past twelve months, they shifted focus to tier 2 and smaller cities, recruiting from nearby areas as consumption patterns in these regions now rival those of large metros.
'There are just 100 cities in metros and tier 1 category, while tier 2 and below have 6,400 cities that have now become the target for the retail industry," said Lohit Bhatia, president-workforce management at Quess Corp, one of the largest staffing and recruitment firms. 'The consumer base has shifted, and for Quess, 40% of our hiring across sectors is now taking place in tier 2 and below," he said. 'Retail forms a large part of it."
Read more: GST reboot: Will bold changes prove to be a silver bullet for India?
India's retail market is projected to grow to $2 trillion by 2032, up from $705 billion in 2020, estimates consulting and accounting giant EY. Still, organised retail remains under-penetrated, leaving enough room for store-led growth. That is expected to propel employment.
'Hiring requests from our retail clients in 2025 have increased by 12-15% for temporary roles and 8-10% for permanent roles compared to 2024," said Sonal Arora, country manager, GI Group Holding, a recruitment firm. 'While 40-50% of these requests may be for replacement hiring, new job creation remains strong, with the industry expected to add 25 million jobs by 2030."
Clients ask staffing firms like Quess to shortlist candidates for temporary roles and those hired stay on the payroll of the vendor. Permanent hires are on the company's direct payroll.
Reliance Retail, Trent, Titan and Avenue Supermarts didn't respond to Mint's emailed queries.
While the strength of the permanent workforce depends on the store format and size, on average, there are at least 15-30 employees per outlet for grocery retail and lifestyle categories. Smaller brands in niche categories, including direct-to-consumer ventures, recruit one or two employees per store.
Instead of hyper-large formats, retail firms are preferring smaller stores, helping them to manage costs, according to Aditya Narayan Mishra, managing director for CIEL HR Services Ltd. 'The compensation offered to permanent store employees at junior levels can range from ₹2-3 lakh in tier 2 and 3, while store managers can earn ₹4-6 lakh a year."
The counterparts in big cities earn twice the amount because of the higher expenses in the metros.
Reliance's surprise
The number of permanent hires at retail companies has jumped 5.8% to 21%, according to their annual reports for FY25.
DMart operator Avenue Supermarts saw a 21% rise in its permanent employees. Trent, locked in a stiff competition with Reliance Retail, has increased the number of employees on its payroll by 9% over FY24 and more than 40% since FY23.
But Reliance Retail has thrown a surprise by upping headcount in FY25 after reducing workforce in the previous year.
Read more: Startups take the DMart playbook to smalltown India—investors like the idea
The company trimmed its retail workforce by 15% to 207,552 employees in FY24. This stemmed from the reduction in some large stores and a duplication of staff following major acquisitions, including Metro Cash and Carry.
However, the company ramped up hiring over the last fiscal year, ending FY25 with a total employee count of 247,782—a 19% increase. During this period, the retail business opened 2,659 new stores, a 2.67% rise on-year, taking the total store count to 19,340.
'Despite the store rationalization, new stores have continued to open. Existing stores were shut and new stores were opened in their place with more focus on profitability," said an executive privy to the development. 'In tandem with that, hiring has also gone up last fiscal, including at the store level as well as the management level."
Store closures have been quite small, Dinesh Taluja, chief financial officer at Reliance Retail Ventures Ltd, said in its earnings call for the June quarter. "We are now on the path of growing our store network."
According to a senior executive in one of the Tata retail firms, the company is hiring in large numbers in tier 3 and 4 cities, where they have seen an increase in consumption. 'We tried going slow on metros about two years ago, but in the last one year, realized that they are picking up as well. However, smaller towns have propelled growth," said the executive speaking on the condition of anonymity.
Untapped markets
Every retailer plans to add new stores despite a slowdown in urban consumption. Most realize there are untapped markets and want to capture prime real estate in large cities to drive higher footfall. That's despite the rise of online retail even in India's tier 2 and 3 cities.
'The retail sector is experiencing a mix of trends in hiring. While some areas are seeing growth, especially in tech-driven roles and seasonal positions, others are facing challenges due to economic uncertainty and changing consumer behaviour," said Vivek Mehta, partner for ABC Consultants, who also tracks the retail sector.
Read more: Sniffing an opportunity as India's small towns get a taste of the big city experience
Still, store additions are projected to grow 18-20% this fiscal year, with a slight increase anticipated in FY27, according to property consultant Knight Frank India. By comparison, FY24 saw 9-10% growth, while FY23 reported an increase of 14-16%.
'Brands are betting on long-term growth in tier 2 and tier 3 cities, where aspirational consumption is rising despite short-term volatility," said Abhishek Sharma, senior director, retail at Knight Frank India, a real estate consulting firm. 'Retailers are largely hiring to build stronger in-store experiences and omnichannel capabilities."
For instance, Aditya Birla Fashion and Retail Ltd has laid out an expansion plan for its formats such as Style Up and Tasva. But in the June quarter, the company's store rollouts slowed down over a year earlier amid macro uncertainty and sluggish consumer demand.
The company didn't respond to Mint's queries.
In the coming quarter, demand for a temporary workforce will surge. An early start to the festive season, unsold summer stock, and extra cash in shoppers' pockets will drive the recruitment sector to hunt for available talent for the next six to eight months.
Read more: Reliance workforce rebounds on the back of retail business