Reliance Retail focuses on disciplined JioMart expansion, targets profitability from FY28
The company is prioritising sustainable growth with investments in dark stores, customer acquisition and margins expected to start contributing positively to profitability from the next financial year.
Reliance Retail Ventures Ltd (RRVL), India's leading retailer, is expanding its dark store network to enhance delivery speeds and increase its presence in smaller cities, all while focusing on unit economics and profitability, according to a senior company official. CFO Dinesh Taluja announced that profitability from this expansion is expected to start contributing positively from the next financial year (FY28).
The company is scaling up its quick commerce operations and building a hyperlocal network to respond to evolving market realities, emphasizing developing capabilities in supply chain and technology.
Taluja highlighted that the company is investing in online businesses to build scale, improving availability, delivery speed, and reliability. However, it remains committed to profitability, including shutting down underperforming large-footprint stores while expanding its dark-store network. The grocery business, with a 42% growth in Q2/FY27, is seeing a scale-up in hyperlocal and online sales.
Reliance Retail added 303 new stores to its sales network, reducing 222 unproductive stores. The company's growth is disciplined, focusing on unit economics rather than vanity metrics like the number of orders or reach.
Unlike competitors investing heavily in standalone infrastructure, RRVL leverages its existing physical store network to support online deliveries, offering a broader omnichannel footprint. The company has a significant presence across more than 5,000 stores in over 1,000 cities, allowing it to tap into untapped demand for online grocery services in smaller cities with lower incremental costs.
RRVL reported improvements in key operating metrics, including higher average order values, increased fully fulfilled orders, and a substantial decrease in average delivery time over the last four quarters.
With a three-year roadmap, RRVL has made substantial progress in growing its JioMart and omnichannel network. The company operates the largest omnichannel network in the country and saw a 42% growth in the online grocery business. Quick-commerce remains competitive, with six players in the market, but Reliance Retail's large store network gives it an edge.
The company plans to prioritize scale-building for JioMart in FY27 before focusing on profitability and value creation in FY28 and FY29, aiming to increase repeat purchases, average basket sizes, and customer lifetime value.
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