Reliance Retail is shifting its JioMart expansion strategy towards sustainable growth, prioritising unit economics, delivery efficiency and customer retention over simply increasing order volumes. The company plans to invest in expanding its online and quick-commerce operations during FY27, with profitability and value creation becoming a greater focus from FY28 and FY29.
Reliance Retail CFO Dinesh Taluja outlined the strategy during the company’s earnings call on October 30, 2026. The plan includes expanding dark stores, improving delivery speeds, strengthening its presence in smaller cities and using its existing physical retail network to support online orders. The company believes these investments can improve margins and cash generation over the following two years.
Key Takeaways
- Reliance Retail is targeting profitability improvements in its online businesses, including JioMart, from FY28.
- FY27 will focus on building digital scale, improving delivery capabilities and strengthening customer retention.
- JioMart’s grocery online revenue increased 42% year-on-year in Q2 FY27.
- Its network expanded to more than 5,000 stores across over 1,000 cities.
- Average order value and units per order have improved.
- Reliance Retail added 303 stores during the September quarter but closed underperforming outlets, resulting in a net reduction of 222 stores.
- The company plans to use its existing retail network to support online deliveries and reduce incremental infrastructure costs.
Reliance Retail’s Three-Year JioMart Strategy
Reliance Retail has outlined a three-year roadmap for its online businesses, with JioMart and its omnichannel operations playing a central role.
The strategy is divided into two broad phases: building scale during FY27 and converting that scale into stronger financial performance during FY28 and FY29.
JioMart’s expansion roadmap
| Financial year | Strategic priority | Main objectives |
|---|---|---|
| FY27 | Build scale | Expand dark stores, improve availability, delivery speed and reliability |
| FY28 | Improve profitability | Increase order density, repeat purchases and contribution margins |
| FY29 | Monetisation and value creation | Improve basket sizes, customer lifetime value, EBITDA and cash generation |
During the earnings call, CFO Dinesh Taluja said the company was investing in capabilities to improve product availability, delivery speed and reliability.
However, he emphasised that expansion would depend on the economics of individual markets.
The company will evaluate order density, repeat rates, fulfilment costs and contribution margins at the dark-store level. Locations that fail to demonstrate a viable path towards positive economics may not receive further investment.
This approach indicates that Reliance Retail does not intend to expand simply to increase its store count or order volumes.
JioMart’s Online Grocery Revenue Grows 42%
JioMart’s expansion is already contributing to Reliance Retail’s digital commerce growth.
The company’s online grocery business recorded 42% year-on-year revenue growth in Q2 FY27. The online share of B2C grocery revenue increased by 270 basis points during the quarter.
JioMart’s network expanded to more than 5,000 stores across over 1,000 cities.
Another important operating indicator was the increase in units per order, which rose 24% year-on-year. Higher units per order can improve delivery economics by allowing the company to generate more revenue from each customer transaction.
JioMart’s key operating indicators
| Metric | Q2 FY27 performance |
|---|---|
| Online grocery revenue growth | 42% YoY |
| JioMart network | 5,000+ stores |
| Cities covered | 1,000+ |
| Increase in units per order | 24% YoY |
| Growth in online share of B2C grocery revenue | 270 basis points |
The company is also monitoring average order values, order fulfilment rates and delivery times.
Taluja said average order values had increased meaningfully, the percentage of fully fulfilled orders had improved and average delivery times had declined over the preceding four quarters.
These improvements could help the company increase customer satisfaction while reducing the cost of serving each order.
Why Reliance Retail Is Expanding Dark Stores
Dark stores are small fulfilment centres designed specifically to process online orders. Unlike traditional retail outlets, they are generally not designed for customers to browse products physically.
They allow quick-commerce companies to store inventory close to residential areas and deliver orders faster.
Reliance Retail is expanding its dark-store network to improve product availability and delivery reliability.
However, the company is also attempting to avoid unnecessary infrastructure duplication.
Unlike online-first competitors that depend heavily on standalone fulfilment infrastructure, Reliance Retail can use its existing physical stores and distribution network to support online orders.
The company operates more than 5,000 retail stores in its broader network and has a presence across over 1,000 cities through its retail operations.
This gives it opportunities to serve smaller markets where standalone dark-store infrastructure may be expensive to establish.
Smaller cities become an important growth opportunity
Taluja said Reliance Retail was witnessing rapid growth in smaller cities, where online grocery demand remains relatively untapped.
The company believes incremental infrastructure costs can be lower in these markets because it can utilise existing retail assets.
Its strategy involves expanding selectively rather than entering every market with a large investment.
This could allow JioMart to increase its geographic reach while keeping fulfilment costs under control.
Reliance Retail Closes Underperforming Stores
The company is also reviewing the performance of its physical retail network.
During Q2 FY27, Reliance Retail added 303 stores but recorded a net reduction of 222 stores after accounting for closures.
This indicates that the company is simultaneously expanding in selected locations and exiting outlets that do not meet its financial or operating expectations.
The strategy is consistent with its focus on productivity and capital efficiency.
For the online business, the company is applying a similar approach by monitoring individual dark-store economics rather than treating network expansion as an objective in itself.
Quick Commerce Competition Keeps Pressure on Margins
India’s quick-commerce market remains highly competitive, with multiple companies competing through discounts, faster delivery promises, product availability and customer acquisition.
Reliance Retail’s competitors include Blinkit, Zepto and Swiggy Instamart.
Competition creates pressure on pricing and customer acquisition costs. Companies must spend on fulfilment infrastructure, inventory, technology and promotions to attract and retain customers.
Taluja acknowledged that quick commerce remains a competitive segment with six active players and pricing pressure.
Reliance Retail is making selective margin investments, particularly in metropolitan markets, to retain customers and remain competitive.
However, the company says its profitable core retail business provides a source of funding for online expansion.
This is an important distinction from businesses that depend more heavily on external funding to finance operating losses.
Reliance Retail’s Q2 FY27 Financial Performance
Reliance Retail reported gross revenue of ₹91,716 crore in Q2 FY27, up 6.4% year-on-year.
However, its profit after tax declined 24.3% to ₹2,611 crore from ₹3,451 crore in the corresponding quarter last year.
The company attributed pressure on profitability to digital commerce investments, higher input costs, increased depreciation and finance costs, and the shift in the festive calendar towards the December quarter.
| Financial metric | Q2 FY27 | Q2 FY26 | Change |
|---|---|---|---|
| Gross revenue | ₹91,716 crore | ₹86,169 crore | +6.4% |
| Net revenue | ₹80,220 crore | — | +5.8% |
| Profit after tax | ₹2,611 crore | ₹3,451 crore | -24.3% |
| EBITDA | ₹5,886 crore | — | -11.1% |
| EBITDA margin | 7.3% | 8.7% | -140 bps |
The company is therefore expanding its online business at a time when its broader retail profitability is under pressure.
Its plan is to use FY27 to strengthen digital capabilities and then improve the financial contribution of those investments in subsequent years.
How Reliance Retail Plans to Improve JioMart’s Profitability
Reliance Retail has identified several operating and commercial levers that could improve JioMart’s economics.
1. Higher order density: More orders from each dark store can help spread fixed operating costs across a larger number of deliveries.
2. More repeat purchases: Regular customers can reduce the company’s dependence on expensive customer-acquisition campaigns.
3. Larger basket sizes: Higher average order values and more units per order can improve revenue generated per delivery.
4. Better product mix: Increasing the contribution of private-label products can potentially improve gross margins.
5. Improved fulfilment efficiency: Better inventory management, fewer cancellations and lower delivery costs can strengthen contribution margins.
6. Monetisation: The company is also looking at increasing marketplace income and other sources of revenue from its digital commerce ecosystem.
The combined effect of these improvements could help JioMart move towards more sustainable profitability.
The Bigger Picture
Reliance Retail’s strategy reflects a broader shift in India’s quick-commerce market. The early phase of expansion focused heavily on acquiring customers, increasing order volumes and building dark-store networks. Companies are now facing greater pressure to demonstrate that these networks can generate sustainable returns.
Reliance Retail has a potential structural advantage through its existing physical stores and distribution infrastructure. However, its ability to convert that footprint into profitable online growth will depend on order density, repeat purchases, delivery costs and competition in individual markets.
Looking Ahead
FY27 will be an important investment period for JioMart as Reliance Retail expands its digital reach and strengthens its delivery infrastructure. Investors will monitor whether the company can improve order density, customer retention and fulfilment efficiency without allowing operating costs to rise disproportionately.
From FY28, the focus is expected to shift towards monetising the expanded network and improving profitability. The key test will be whether higher order values, repeat purchases and better utilisation of existing assets translate into stronger EBITDA and cash generation.
Frequently Asked Questions
1. When does Reliance Retail expect JioMart to become profitable?
Reliance Retail’s roadmap targets profitability improvements in its online businesses, including JioMart, from FY28, following a scale-building phase in FY27.
2. How much did JioMart’s online grocery revenue grow in Q2 FY27?
JioMart’s online grocery revenue increased 42% year-on-year in the September quarter of FY27.
3. How many stores does JioMart operate through its network?
JioMart’s network expanded to more than 5,000 stores across over 1,000 cities.
4. Why is Reliance Retail expanding dark stores?
Dark stores help improve product availability, reduce delivery times and support quick-commerce operations by keeping inventory closer to customers.
5. What is Reliance Retail’s strategy for FY27?
The company plans to expand online scale, improve delivery speed and reliability, strengthen omnichannel capabilities and monitor unit economics in individual markets.
6. How will Reliance Retail improve JioMart’s margins?
It plans to increase order density, repeat purchases and basket sizes, improve product mix, reduce fulfilment costs and increase monetisation.
7. What was Reliance Retail’s Q2 FY27 net profit?
Reliance Retail reported profit after tax of ₹2,611 crore, down 24.3% year-on-year, partly due to digital commerce investments and other cost pressures.
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