Industry Odisha Bureau, Oct 19: Fast doorstep delivery, steep rents and high staffing costs are squeezing traditional convenience chains. Survivors are testing franchising, direct ownership and specialist ranges to stay relevant.
India’s grab-and-go convenience stores are losing ground to quick commerce. Fast doorstep delivery has blunted their key edge: proximity. Organised chains, burdened by rent and high staffing costs, are stranded between kiranas and apps.
7-Eleven shut its last 31 outlets on 30 September as its Reliance Retail franchise ended. The chain entered India in 2021 and peaked at about 60 stores. Its Japanese parent, Seven & i Holdings, said it would explore long-term options in India.
The exit follows Godfrey Phillips India’s April 2024 decision to quit its 24Seven chain. Neither exit rests on quick commerce alone, but both show the format’s scaling problem.
Convenience stores’ traditional draw is quick access and long hours. Devangshu Dutta, founder of consultancy Third Eyesight, said the real struggle began with quick commerce. Minutes-long delivery cuts the need to visit a nearby store, he said. Supermarkets offer wider ranges, while kiranas run leaner and adapt faster, he said.
A Redseer Strategy Consultants-Google report of 7 October shows the overlap. Among occasional users, quick commerce takes under 5% of monthly grocery stock-up spending. Its share of daily or immediate-need spending is 15–20%. Those quick, top-up purchases are the core business of convenience stores.
Small outlets have limited shelf space and higher operating costs per square foot than supermarkets. Their smaller average bills must still cover commercial rent and staff wages.
The New Shop ran 60–70 company-operated stores before turning franchise-first in 2022. Co-founder Aastha Alamast said franchising is central to convenience-retail economics. That spreads capital costs and daily running across owners. A new outlet costs under ₹20 lakh, including capital expenditure and inventory. Alamast said the company has been profitable for three years, since reaching about 110 stores.
Indian venture investors questioned franchising, so funding came mostly from American and Korean backers. Its stores also offer courier pick-up, ticket booking and EV charging.
AMPM is quitting franchising after procedural lapses and payment disputes, founder Shubham Gupta said. All its stores are being converted to company-owned, company-operated outlets. That typically means tighter control but higher capital needs. AMPM runs 12 stores and has signed over 18 store agreements. It plans 10–30 minute local deliveries once it reaches 50–100 stores. Licensing hurdles meant its first store, researched from 2012, opened only in 2017.
Wellness Forever, a chain of about 500 pharmacies in five states, bets on expertise. Co-founder Ashraf Brian said pharmaceuticals bring 60–65% of sales, other goods 35–40%. A typical store carries about 7,000 medicine lines; he puts some rivals at 3,000–4,000. After quick commerce dented sales of cold drinks and ice cream, it cut food sharply. It has expanded skincare, vitamins and supplements, where its 2,000-plus pharmacists can add an edge.
Still, Japan’s Lawson plans five directly managed Mumbai stores in 2027. It aims for about 100 Indian outlets by 2030. Dutta said metro stations suit small formats, as hurried shoppers buy for instant use. Success, he said, depends on location, assortment and tight cost control.
