DMart says land acquisition remains a challenge, keeps leasing option open, flags NCR

DMart MD and CEO Anshul Asawa said it may lease stores where suitable land is difficult to acquire, with NCR among the markets where the model could be relevant

Retail major DMart, operated by Avenue Supermarts Ltd, said that acquiring land and developing properties remain a challenge as it expands its store network. The company has kept the leasing option open if it cannot acquire land that meets its requirements, particularly in markets such as the National Capital Region (NCR), where suitable properties are difficult to acquire.

DMart, operated by Avenue Supermarts Ltd, said that acquiring land and developing properties remain a challenge as it expands its store network. (Picture for representational purposes only) (Mint)

Why is DMart opting for the lease model?

DMart, which opened its first store in Mumbai in 2002, has traditionally followed an ownership-led model rather than leasing its stores. The retailer typically develops stores to meet its operational requirements and regulatory norms, while ensuring adequate staffing to run them.

"We have built a team, it can actually scale more and more stores for us in the future. But land acquisition and building a property is always going to be a challenge, and so therefore we do not want to rush into it, and we do want to make sure that whatever we are doing, we are doing properly," said Anshul Asawa, MD and CEO of DMart while speaking during company's investors call for Q1FY27.

"We are building a store as per our requirement, we are building as per the regulatory requirements, and ensuring that we have people staffed in it who can run the store operations as per the DMart ways of working. The option of lease, as I've mentioned already, is always open if we are not able to get land that meets our requirements. This is something which will be, for example, very relevant for a market like NCR where it is always difficult to get an owned property. Or for that matter, in other geographies as well, we are looking at that option," Asawa said.

According to Asawa, “If, for example, we are not able to acquire an owned-land property, then we will move to a lease option if that meets our requirements.”

All about DMart's real estate portfolio

D-Mart is a national supermarket chain that offers customers a range of home and personal products under one roof. The company provides products focusing on foods, non-foods (FMCG), general merchandise and apparel product categories.

According to company data, the company owns a majority of 128 stores in Maharashtra, followed by 76 in Gujarat, 50 in Karnataka, 48 in Telangana, 47 in Andhra Pradesh, 36 in Tamil Nadu, 29 in Madhya Pradesh, 28 in Rajasthan, and 21 in Delhi-NCR, among other parts of the country. The company's store count has almost doubled in the last four years, from 284 in FY22 to 503, as of today.

DMart opened 85 stores in the last year, of which 15 stores were opened in the lease model. Out of the total, 68 DMart stores are on a lease model. According to the company, it plans a 15% annual increase in the number of its stores.