Race for stores runs in face of urban slowdown

Apps may be on fire and commerce going quick, but urban retailers selling everything from apparel to food and jewellery are racing to open stores in malls and high streets, betting on an impending consumption upsurge.

- Suneera Tandon

Retail giants such as Aditya Birla Fashion and Retail Ltd and Tata Group-backed Trent Ltd, and startups like Mokobara and Sugar alike are pressing ahead with plans to expand their physical footprint, as lower income taxes and bountiful monsoon spark optimism in corporate corridors.

Store additions are projected to grow 18-20% this fiscal year, with a slight increase anticipated in FY27, according to property consultancy Knight Frank India. In comparison, FY24 saw 9-10% growth, while the previous year reported 14-16%.

"Contrary to what people think, that retail expansion has been kept on hold, per our estimates, we anticipate an 18-20% growth in number of store additions this fiscal year; by 2030 this may go up to 25-30%," said Abhishek Sharma, senior director, retail agency at Knight Frank India.

The focus on physical stores at a time of subdued urban consumption and growing e-commerce underlines retailers' confidence that shoppers will be back as the economy gathers steam. Experts said retailers plan store networks with 10-20 years ahead in mind, locking in prime spaces in anticipation of demand increasing.