Mukesh Ambani’s Reliance Retail is undergoing a significant strategic overhaul, shifting its focus from aggressive expansion to rapid profitability. According to a report by The Economic Times, Reliance Retail has issued a new directive to its freshly opened stores: become self-sustaining within six to twelve months or face closure. This marks a major shift from the company's earlier approach, where new outlets were given up to two years to turn profitable.
The reason for this sudden change lies in the company’s preparation for an upcoming Initial Public Offering (IPO). To ensure a successful public listing, Reliance Retail is now working to strengthen its financial performance, improve profit margins, and enhance its valuation. A senior executive, during a closed-door meeting with analysts, confirmed that the IPO plan exists and will be revealed publicly in due course.
Reliance Retail, known for opening over 1,000 stores annually, launched around 3,300 new outlets in FY23 alone. However, that pace is now being moderated. The company plans to limit store launches to about 500–550 annually moving forward. One executive remarked that “the days of mindless expansion are over,” but emphasized that the overall store count will still rise each year to support revenue growth. In line with this focus on profitability, over 3,650 unprofitable stores have already been shut down in the past three fiscal years. As of March 2025, the total number of operational Reliance Retail stores across India stood at 19,340.
This strategic pivot also involves a more cautious approach to store location selection. Reliance now aims to ensure that at least 90% of its stores hit their break-even targets quickly, reducing long-term financial risk. Break-even refers to the point at which revenue equals the cost of operations, and Reliance is now aggressively aligning its operations to achieve that goal across most outlets.
At the same time, the company is doubling down on high-margin and premium retail segments. Reliance Retail operates across a broad spectrum through brands such as Reliance Fresh, Reliance Digital, Reliance Trends, MyJio, Ajio, and Reliance Jewels, selling products ranging from groceries and apparel to electronics, jewelry, eyewear, pharmaceuticals, and handicrafts. However, a noticeable shift is underway toward luxury and high-income consumer segments. Under the Reliance Brands division, the company now sells high-end global labels like Armani Exchange and Hugo Boss in India.
Premium grocery formats like Freshpik and Go Fresh have also received encouraging customer response. As a result, CFO Dinesh Taluja has confirmed plans to expand these concepts into more upscale neighborhoods. Similarly, in the fashion segment, Reliance is reworking its value apparel strategy through its Trends and Azorte brands to better connect with younger, trend-conscious consumers.
Another area seeing rapid development is quick commerce. In Q4 of FY25, Reliance Retail saw its order volume in this segment increase by 2.4 times. The company is now planning to offer 30-minute deliveries, fulfilled directly from nearby physical stores, eliminating the need to set up separate dark stores and optimizing last-mile logistics.
Financially, Reliance Retail reported a turnover of approximately ₹2.91 lakh crore (around $35 billion). The company’s EBITDA margin — which reflects earnings before interest, tax, depreciation, and amortization — has been steadily improving. It stood at 7.6% in FY22-23, rose to 8.1% in FY23-24, and reached 8.3% in FY24-25. This improvement is largely attributed to shutting down loss-making stores and enhancing operational efficiency.
Mukesh Ambani, famous for disrupting the telecom sector with Jio’s launch in 2016, is now applying similar strategic thinking to his retail empire. While his earlier businesses saw heavy upfront investments and long gestation periods, this time, Ambani appears to be aiming for faster returns. The new strategy reflects a clear intent to balance scale with sustainability, and profit with precision.
As Reliance Retail prepares to go public, its success will likely depend on how effectively it can navigate this new phase of calculated growth, premium positioning, and disciplined profitability.
