New KIRI report identifies high-potential urban PIN codes and ‘hidden-gem’ cities to drive capital-efficient retail expansion
Global management consulting firm Kearney has unveiled the 2026 edition of the Kearney India Retail Index (KIRI), spotlighting the growing importance of hyperlocal intelligence in navigating India’s expanding but uneven retail landscape.
Launched at the Retail Leadership Summit, the report positions pin code-level analysis and format-specific strategy as essential tools for retailers seeking capital-efficient growth.
A Rs 95 Lakh Crore Market, But Uneven Growth
India’s retail market is currently estimated at approximately Rs 95 lakh crore, growing at around 9 per cent annually. The expansion is being fuelled by rising digital adoption — with UPI transactions touching 228 billion in 2025 — and the rapid emergence of quick commerce, now valued at an estimated Rs 64,000 crore.
However, the report highlights that growth is far from uniform. Consumption patterns can vary significantly not only across cities but even between adjacent catchments within the same urban area. This has created distinct micro-markets that demand granular planning.
In FY25, several pan-India retailers reportedly shut 10–15 per cent of stores, often due to misalignment between location, format and local demand. The findings underscore the risks of expansion strategies driven primarily by intuition rather than data-backed local intelligence.
10 per cent of Urban PIN Codes Identified as ‘Growth Hotspots’
KIRI 2026 estimates that nearly 10 per cent of urban PIN codes qualify as high-potential “growth hotspots” — areas where consumption potential is strong but organised retail penetration remains relatively low.
The index also notes a reshuffle in city rankings over the past five years. Hyderabad, Pune, Jaipur and Lucknow have moved up the retail potential ladder, supported by infrastructure upgrades, residential development and policy initiatives.
Additionally, the report identifies more than 30 “hidden-gem” cities where consumer demand is accelerating despite comparatively lower formal retail presence — markets that could shape the next phase of India’s retail expansion.
Category-Specific, Hyperlocal Insights
Beyond city-level assessment, KIRI 2026 offers category-specific and price-segment-specific analysis across eight major retail segments: apparel, footwear, accessories, jewellery, electronics, food and grocery, beauty and personal care, and home furnishing.
The study covers more than 800 cities and 8,000 urban PIN codes, mapping demand-supply gaps and identifying both under-penetrated zones and saturated markets.
Karan Dhall, Partner, Consumer Industry & Retail Practice at Kearney, said precision is becoming non-negotiable. “In today’s environment, where capital costs are rising and store economics are under pressure, expansion cannot be driven by intuition alone. The winners will be those who continuously recalibrate their networks as demand, infrastructure and digital behaviour evolve at a micro-market level.”
Deepak Sharma, Senior Principal at Kearney, added that a data-driven approach enables retailers to target high-ROI pockets, avoid underperforming locations and protect margins.
Capital-Efficient Expansion
The report positions hyperlocal intelligence as a strategic lever for retailers and investors seeking disciplined growth. By aligning formats with local preferences and identifying untapped geographies, KIRI 2026 aims to reduce investment risk while improving return on capital deployed.
As India’s retail market deepens and digital commerce reshapes consumer behaviour, the index suggests that competitive advantage will increasingly hinge on precision — not scale alone.
