20% of traditional grocers in Chennai have shut up shops in five years, says GCC

The number of licensed grocery stores measuring less than 500 sq.ft. has fallen from 10,645 to 8,476 retail outlets in the last five years.
| Photo Credit: R. RAGU

Over 20% of the traditional grocers in Chennai have shut up shop in the last five years and 30% of larger departmental stores selling groceries from more than 1.000 sq.ft. area have closed during the same period, according to Chennai Corporation. The civic body has started holding talks with traders’ associations to facilitate welfare schemes for the traders and protect their livelihood.

Chennai Corporation has already relaxed norms pertaining to trade licence. The number of licensed grocery stores measuring less than 500 sq.ft. has fallen from 10,645 to 8,476 retail outlets in the 426 sq.km. of Chennai Corporation.

As many as 2,169 grocers closed down in the past five years in Chennai with the Royapuram zone, covering the Central Business District of George Town, accounting for the largest number. A total of 286 out of 1,342 grocers in Royapuram zone shut shops in the past five years.

In Kodambakkam zone covering commercial areas such as T.Nagar, 199 out of 645 grocers closed their outlest in the last five years. A total of 207 out of 695 grocers closed down in Teynampet zone while 183 out of 634 in Anna Nagar shut down during the same period after COVID-19 pandemic. In the Adyar zone, 171 grocery stores had closed while 537 trades were active as on March 5, 2025.

While the average reduction in the number of grocers is around 20% in the 15 zones of the city, zones such as Perungudi, with many IT professionals in the vicinity of Rajiv Gandhi Salai, registered more than 34% reduction in the number of grocery stores.

Chennai Corporation has not maintained records of traditional grocers who closed the trade after demonetisation in 2016. According to data maintained by Greater Chennai Corporation, the licensed departmental stores (bigger supermarkets) in the 15 zones of Chennai came down from 577 to 388 in the last five years.

Chennai Corporation has issued licences for the highest number of large departmental stores in Anna Nagar zone with 67 active licences as on March 5, 2025. As many as 27 out of 95 large departmental stores had been closed in the last five years in Anna Nagar. in Kodambakkam zone, 23 out of 89 departmental stores had been closed

Online buying

S.Nagabushanam, a representative of traders in the Central Business District, said the business of more than 70% of the grocery stores was not profitable and only 30% of the traders reported profits in the last three years. “Property tax and other charges have increased. Rental values have risen. Traders are holding talks with the officials to relax the rules pertaining to fee collection for trade licences and sort out professional tax issues, property tax issues and protect the livelihood. People don’t seem to have enough money to spend, particularly buying groceries. However, a section of the people who could afford it are buying food online. So the purchase of groceries directly from shops has reduced,” he said. 

Pointing to the rapid rise of quick commerce platforms, traders said aggressive price-cutting strategies and evolving consumer preferences, were placing significant pressure on traditional grocery stores and small traders. Coupled with escalating real estate costs, many of these neighbourhood stores were struggling to compete and were, unfortunately, being forced to shut their doors. 

Mani, who had been running a small 100 sq ft grocery shop in T. Nagar for over two decades, was forced to shut down his business due to the relentless rise of quick commerce and e-commerce giants. “Apart from canned water, no one has been calling me for any other products. Consumers now believe that quick commerce sites deliver faster than I can.

Rental cost

“For the past nine months, my business has been in the red, and I simply couldn’t keep up. I don’t have the resources or manpower like the big platforms to meet the demands of today’s customers. Also real estate and rental costs are increasing which is an additional burden. So I wound up,” he said.

Many shop owners across Chennai, claimed their sales significantly dropped 30-40% due to the rise of online platforms. “Nobody wants to step out to buy anything anymore. Even basic items like vegetables and milk are being purchased online,” said Manoj, who runs a grocery store in the city.

“People don’t have the time – they prefer products that are delivered right to their doorstep within minutes,” he added. 

Uncontrolled growth

P.M. Ganeshraam, the head of the Tamil Nadu Consumer Products Distributors Association and the Chief Patron and Senior National Secretary of All India Consumer Products Distributors Federation, stated that the uncontrolled growth of quick commerce had caused the closure of numerous shops. Uncontrolled quick commerce was an immediate danger to the economy and livelihood of traditional kirana traders, he said. He highlighted that not only small retailers running maligai kadais (grocery stores) but even existing supermarkets were facing significant challenges, with many franchisees incurring losses. “Quick commerce attracts consumers with heavily discounted prices. A mechanism has to be brought in wherein both quick commerce and small traders can co-exist, he said.

A.M. Vikramaraja of the Tamil Nadu Vanigar Sangangalin Peramaippu stated that while online platforms cannot be completely halted, some level of control needs to be implemented, especially on the pricing front.