Description
India’s Food and Grocery Retail market offers one of the largest opportunity areas for business. The F&G category accounts for about 57% of the total retail market in India. There are an estimated 8-9 million food & grocery stores (including local kirana shops, hawkers etc.) in the country.
Images Research finds that the penetration of modern organised retail in food is currently one of the lowest at 1.6 per cent. However, this is also expected to change dramatically over the next decade as organised retailers penetrate the markets deeper. By 2025, organised retail is expected to capture at least 3.2% of the food & grocery market and be worth INR 340,000 crore, growing at a CAGR of 22.5% from current levels.
While the food & grocery category will continue to grow at about 13-14% per annum over the next decade, food & grocery retail is expected to dominate the market with more than 50% share of the overall retail market in the foreseeable future.
Going forward, local kirana stores and street hawkers will however continue to dominate the food & grocery market with a 90% plus share, even in 2025. The unorganised, organised and online players will co-exist in the Indian retail ecosystem and will expand the market for each other, as all have unique strengths and the sector is large enough to accommodate all participants. It is expected that unique partnership models will emerge as the retail market matures and this partnership will further push the sector’s growth.
