India’s quick commerce players may no longer be rolling out dark stores at the breakneck pace of last year, but competition for prime locations in top cities has only intensified for several quarters now.
In dense catchments of Delhi-NCR, Mumbai and Bengaluru, much of the suitable real estate is already occupied, leaving little room for either incumbents or new entrants to expand further.
“Getting suitable space for dark stores in high-density neighbourhoods in top cities has become increasingly difficult. In areas like Indiranagar (Bengaluru), for instance, we are struggling to get a store, since a lot of quick commerce firms are now bidding for the same locations,” a top executive at a Bengaluru-based vertical quick commerce platform told Moneycontrol.
A second executive at another large quick commerce platform said their company, too, faces similar challenges in Mumbai, especially the southern areas of the city. Players are either outbidding rivals to bag a rental spot or there is no space left for more dark stores to be set up, which is leading to price increases.
These challenges aren’t limited to newer entrants. Market leaders like Blinkit and Instamart are also running into the same constraints, with competitive intensity, especially in real estate, having remained elevated for several quarters now.
“There has been significant competition for the same real estate in most of the cities that we are in,” said Blinkit CEO Albinder Singh Dhindsa, in an earnings call while announcing the firm's Q4FY25 results.
His colleague, Akshant Goyal, CFO, Eternal - the parent company of Blinkit - said the competitive intensity is only increasing. “...the competition hasn't reduced in any way. It was definitely way more competitive in terms of price action that we saw in the market in the quarter prior to that (Q3FY25),” he said.
“So, anything you pick up, whether it is pressure on real estate costs, marketing cost, incentives, etc. all of that continues to peak at least so far going into the last quarter. We are continuing to see elevated competition in the market so far,” Goyal added.
Staff vacancy a double whammy
Alongside the real estate squeeze, platforms are grappling with staffing shortages at dark stores, where recruiters report vacancy levels touching 30 percent in some key markets.
According to several brokers, real estate consultancies and hiring platforms Moneycontrol spoke with, pressure on both fronts has grown more visible over the past year, as dark stores have nearly doubled in number and quick commerce players push deeper into Tier II and III cities alongside the metros.
Staffing firms say the scramble for labour has intensified alongside the hunt for space. Each dark store requires a steady pool of packers, sorters and supervisors, and metro markets alone are now opening thousands of positions each month.
“Demand for dark-store workers in metro areas has surged. There are 8,000–10,000 open positions per month in metro cities just for warehouse and dark store ‘under-the-roof’ roles,” said Balasubramanian A, Senior Vice President at TeamLease Services.
Attrition is making matters worse. TeamLease estimates monthly churn of 15–25 percent among dark store staff, compared with over 30 percent for delivery workers. Vacancy levels add to the pressure — Adecco India says some newly launched catchments are seeing rates of 20–30 percent.
“Dark store operations are expected to see a hiring surge of 40–60 percent, translating to roughly 80,000–100,000 new hires across dark stores and delivery roles,” said Deepesh Gupta, Director and Head of General Staffing, Adecco India.
This pressure is set to intensify further as more companies continue adding dark stores to their networks.
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What makes dark stores attractive to landlords?
Dark stores, once seen as an improvised fix, are now a permanent feature of Indian real estate. Typically spanning 3,000–6,000 sq. ft., they are located within dense residential catchments to cut delivery times, making them scarce and keeping supply under pressure.
“These rents are typically around 30 percent cheaper than renting retail spaces in prime areas of similar sizes, but they can bring in twice as much rent as regular warehouse facilities,” said Anuj Kejriwal, CEO & MD, ANAROCK Retail – a real estate consultancy.
While rents have only inched up 3–5 percent annually over the past two years, landlord interest has spiked. Underperforming shops, supermarkets and basements are increasingly being pitched to quick commerce operators, reflecting strong demand.
How much are companies paying for space?
According to Savills India, a real estate consultancy firm, rental values as of May 2025 range from Rs 40–80 per sq. ft in cities like Hyderabad, Pune and Chennai, rising to Rs 90–150 in Mumbai and Rs 150–200 in Delhi.
In some premium pockets of Bengaluru, however, ANAROCK has tracked landlords quoting as much as Rs 770 per sq. ft.
“Landlords have responded positively with a rise in pitches and inquiries focused on dark store leasing, converting spaces such as old retail shops, ground-floor commercial buildings, basements, and small warehouses,” said Srinivas N., Managing Director, Industrial and Logistics – Bengaluru, Savills India. “This growth is not confined to Tier I metros; Tier II and III cities are also witnessing significant leasing activity.”
Leases typically carry a nine to twelve-month lock-in and last two to three years.
Who is driving the race for dark stores?
Incumbents like Blinkit, Swiggy Instamart, Zepto and BigBasket continue to dominate leasing, but Flipkart and Amazon have also joined the fray, tightening supply in already dense neighbourhoods.
Even with the rollout slowing from last year’s frenzy, expansion remains hefty. Blinkit added 243 new dark stores in the June quarter, taking its total to 1,544, with plans to reach 3,000. Swiggy Instamart added 41, bringing its network to 1,062. This was, however, significantly lower than the 314 stores it had added in the March quarter.
Industry estimates put India’s dark store count at over 4,000.
Brokers say this has made competition for prime sites sharper across metros. In Mumbai, for instance, one broker noted: “While Blinkit and Instamart continue to dominate the dark store leasing market, the sharper contest for space right now is between platforms like Zepto and new players like DMart Ready, which has been actively picking up properties in Mumbai and other key cities.”
Are new players and vertical quick commerce companies adding to the dark store squeeze?
A wave of vertical startups are now experimenting with dark-store-led models beyond groceries. Startups like Pronto and Snabbit are targeting home services, Slikk, Newme and Knot are building for fashion, Swish and Zing are testing food delivery, while Peeko and Ozi are focused on baby care.
Their scale remains small compared to incumbents, but they are still adding to demand in already tight catchments, particularly in metros. With both incumbents expanding and new entrants scaling, as many as 8–10 players can end up competing for the same rental space in key neighbourhoods.
In such contests, it is landlords who stand to benefit the most, as rising demand pushes up rents and leaves property owners with the upper hand.
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