The new math of India’s fashion retail is sales per sq. ft. over store footprint

03 September 2025, Mumbai 

India’s fashion and apparel retail sector is in the midst of one of its most defining shifts. Once a frenzied race for sheer presence measured in store counts, mall tie-ups, and pan-India visibility the sector has reached a point of recalibration. Today, leading retailers, from legacy chains to digital-native labels, are less obsessed with opening more stores and more focused on ensuring every door is profitable. This change in approach reflects not retreat but maturity. A blend of evolving consumer expectations, technological disruption, investor scrutiny, and global best practices has nudged Indian retailers to pursue disciplined growth.

Focus on growth with caution

India’s fashion retail market is one of the most promising worldwide. According to TechSci Research, the industry, valued at $60.12 billion in 2024 it is projected to grow at a CAGR of 12.87 per cent, nearly doubling to $124.32 billion by 2030. Yet, this increase will look markedly different from the heady days of the 2010s, when retailers scrambled to flood every urban and semi-urban hub with outlets.

Now, the emphasis has shifted. Chains are pruning underperforming stores, consolidating operations, and carefully evaluating where new investments make sense. Malls, too, have become choosier: instead of filling space indiscriminately, they’re curating their brand mix to attract consistent footfall and boost sales per square foot. The result is a more disciplined ecosystem less about chasing footprint and more about sustaining financial health.

Reasons for the shift

One major factor is the evolving consumer. Indian shoppers today are harder to impress. Price sensitivity remains, but it no longer guarantees loyalty. Consumers increasingly weigh quality, authenticity, and brand experience against affordability. A growing Gen Z which is cohort digitally savvy, brand-conscious, and experimental expects personalization, omnichannel ease, and ethical practices. The outcome, retailers can no longer rely solely on low prices or sheer availability.

Omnichannel’s growth is another factor. The boundaries between e-commerce and brick-and-mortar have dissolved. A 2023 consumer survey showed 77 per cent of Indian fashion buyers prefer hybrid shopping browsing online, but validating purchases in-store, or vice versa. Retailers from Zara to Reliance Trends are investing heavily in omnichannel ecosystems, integrating apps, loyalty programs, and in-store tech to ensure frictionless movement across platforms.

Digital-first brands too have rewritten the retail rulebook. By mining online sales data and consumer insights, they identify demand hotspots before committing to physical stores. For example, several D2C fashion startups are reverse-engineering their expansion using digital traction in Tier-II, III cities to justify store launches. Meanwhile, legacy retailers are embedding advanced analytics into everything from supply chain forecasting to customer lifetime value (CLV) tracking.

Table: Performance indicators in Indian fashion retail (2024-25)

This table illustrates a clear move from a ‘build it and they will come’ mentality to a more focus on numbers-driven approach. Retailers are analyzing metrics such as sales per square foot, customer acquisition cost (CAC), and customer lifetime value (CLV) to make informed decisions about their physical and digital footprints.

Retailers leading the change

V2 Retail, betting on private labels: Value fashion retailer V2 Retail is rewriting its profit story through vertical control. With 80 per cent of its assortment already private labels, the company is moving toward a 100 per cent in-house portfolio, eliminating dependence on third-party brands. This approach secures higher margins, better control over design-to-delivery, and a differentiated value-for-money proposition, critical in India’s highly price-sensitive fashion segment.

Ace Turtle, digital data guiding physical growth: Bengaluru-based Ace Turtle exemplifies how data can power expansion. Managing brands like Lee and Wrangler, it plans to double its retail footprint in 2025, but only in markets validated by strong online traction. For instance, Tier-II, III cities, once risky bets, are now prime candidates backed by proven e-commerce demand. This hybrid approach demonstrates how digital insights can de-risk physical expansion.

Reliance Retail, from scale to sustainability: India’s retail behemoth Reliance Retail has shifted gears. Once synonymous with rapid-fire store launches, it now emphasizes profit-first operations. By optimizing its mammoth footprint, investing in store experience, and leveraging its scale efficiencies, Reliance signals to the wider industry that profit is the new benchmark of success not just size.

Global parallels and India’s catch-up moment

This recalibration isn’t happening in isolation. Global retail markets, from the US to China, have long witnessed similar cycles. After a glut of store openings in the 2000s, American giants like Macy’s and Gap adopted a “fewer but better” approach. Chinese e-commerce platforms, meanwhile, used data to push into offline retail. India, though a decade behind, is now converging on the same model powered by its digital boom and maturing consumer base.

Focus on resilience over recklessness

The Indian fashion retail sector is no longer just sprinting toward scale rather it is building stamina. Retailers are realizing that fewer, more productive stores; deeper omnichannel integration; and sharper customer segmentation will deliver sustained growth. For consumers, this means fewer but better shopping experiences more personalized, convenient, and consistent across touchpoints. For investors, it signals a market coming of age, prioritizing healthy returns over vanity metrics. The new mantra is clear: in India’s fashion retail, success will not be measured by how many doors open, but by how much value flows through them.

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