A new knowledge report by Vector Consulting Group reveals that 91% of organised retail stores in India suffer from revenue loss at the shelf, with many continuing to operate below optimal profitability. The findings point to a widespread gap between store-level performance and effective shelf management.
Titled The Ticking Shelf: The Overlooked Economics of Store Performance, the report was launched at the Retailers Leadership Summit 2026 organised by the Retailers Association of India. The study is based on insights from CXOs and senior leaders across 100 organised retail chains, each with annual revenues exceeding ₹500 crore.
Despite healthy category-level growth, the report highlights that a significant portion of retail networks remain unprofitable. Between 28% and 40% of stores across formats and categories continue to underperform, indicating structural inefficiencies in store economics rather than isolated operational issues.
One of the key findings is the limited use of shelf throughput as a decision-making metric. While shelf velocity is critical to profitability, only 9% of retailers currently use it to guide daily decisions related to buying, replenishment and product display.
Ageing inventory remains a major concern across categories, occupying valuable shelf space and reducing productivity. Nearly half of on-shelf inventory in Mobile and Consumer Electronics exceeds its ideal selling period. Apparel and Footwear report 24% ageing stock, Home and Furniture 40%, and Jewellery and Personal Wear 43%. This not only reduces shelf efficiency but also compresses the full-price selling window for new product launches.
According to P. Senthilkumar, Senior Partner at Vector Consulting Group, retailers often prioritise margin protection through bulk buying and long lead times, while simultaneously expanding SKU assortments. These practices inflate inventory levels, making corrective actions such as markdowns, stock transfers or pullbacks feel costly, leading to delayed intervention and higher eventual losses.
The report further notes that most retailers lack robust, rule-based processes to manage inventory freshness. As a result, ageing stock is handled reactively rather than as part of a routine, system-driven approach.
Commenting on the findings, Kumar Rajagopalan, CEO of the Retailers Association of India, stated that improving retail and company-level profitability remains a core focus for the industry. He noted that the report offers useful frameworks to identify levers such as shelf productivity and asset efficiency that can drive better financial performance.
To counter shelf-level revenue leakage, the study recommends treating shelf space as a perishable asset. Key measures include disciplined control of product portfolios, performance-based space allocation, faster and more responsive supply chains, early exits for slow-moving products, and quicker deployment of proven bestsellers through gap-led replenishment strategies.
