India's retail leasing landscape is undergoing a dynamic transformation, with changing consumer habits and generational preferences driving a significant shift in space uptake patterns.
According to the latest report by Anarock Research, apparel and food & beverage (F&B) brands accounted for a dominant 54 per cent of total retail leasing in H1 2025 across the country’s top seven cities, absorbing over 2 million sq. ft. of net space.
This remarkable figure underscores the growing dominance of lifestyle-centric categories in India’s modern retail ecosystems. Apparel alone, while still the largest segment, leased 33 per cent of the total area, while F&B occupied 21 per cent, marking a paradigm shift from traditional value-based retail to experience-driven consumption.
Individually, the leasing share of F&B has grown from 8 per cent in FY19 to 12 per cent in FY25, and is projected to touch 16 per cent by FY30.
This growth in F&B is part of a broader high-value consumption trend, fuelled by millennial, Gen Z, and now Gen Alpha consumers who are seeking engaging, sensory-rich, and digitally-enhanced retail experiences over traditional transactional shopping.
Consumer Mindset Driving Realignment
The evolution in retail leasing patterns reflects a deeper shift in the consumer psyche. Previous generations relied on brand trust, word-of-mouth, and habitual buying. Today’s younger shoppers prioritize convenience, flexibility, emotional connection, and ethical alignment. Social media trends, influencer endorsements, and instant gratification are fast becoming key purchase drivers.
This is prompting developers and brands to reimagine mall layouts, tenant mixes, and digital infrastructure to cater to experience-seeking, value-driven consumers. AI integration, sustainability initiatives, and hyper-personalisation are becoming key differentiators for brands vying for footfall and loyalty.
Retail Outlook: Flexibility, Tech, and Experience Are Key
With retail’s centre of gravity shifting, the onus is now on brands to adapt, innovate and connect. Leasing trends suggest a long-term move towards formats that fuse experience with function, and digital with physical. The growth of food courts, lifestyle cafes, boutique jewellery stores, and immersive beauty lounges within malls is emblematic of this new age.
What could be the driving factor for the increased F&B leasing share ?
As incomes rise, spending habits evolve, leading to significant changes in various sectors. One of the most notable shifts is seen in the food and grocery sector, which is emerging as a new focus in retail investment. This trend isn't confined to India; it's a global phenomenon driven by increased GDP per capita and changing consumer preferences. Let's dive into why the food and grocery sector is attracting so much attention and investment.
Economic Growth and Rising Incomes
One of the primary drivers behind the surge in the food and grocery sector is economic growth. When a country's GDP per capita surpasses $2,000, it signals that basic needs like food, clothing, and shelter are largely met. At this stage, people begin to allocate more of their income towards food and other non-essential items. This shift is evident in India, where per capita spending on food has been rising steadily.
For instance, in urban areas, the average monthly per capita expenditure (MPCE) more than doubled from Rs 2,630 ($31.73) in 2011–12 to Rs 6,459 ($77.93) in 2022–23. Similarly, in rural areas, MPCE rose from Rs 1,430 ($17.25) to Rs 3,773 ($45.52) during the same period. Innovative food ventures are responding to this demand by offering high-quality, preservative-free options with extended shelf lives, catering to the evolving tastes of consumers.
The Restaurant and Dining-Out Boom
As incomes continue to rise and cross the $4,000–$5,000 threshold, the growth extends beyond groceries to the restaurant industry. People start dining out more frequently, driven by higher disposable incomes and a preference for convenience.
Additionally, with the increasing cost of labor for cooks and domestic help, more people are opting to order in or eat out rather than cook at home. This trend not only boosts the restaurant industry but also fosters a vibrant street food culture.
New-age one-stop shops for Indian sweets are also helping in this boom by increasing the average order value (AOV). Some of these vendors offer Indian sweets with a six-month shelf life in single-serve formats, revolutionizing restaurant menus by addressing shelf-life challenges and satisfying post-meal cravings.
Narrowing Cost Gap Between Eating Out and Cooking at Home
Currently, there's a significant price difference between buying food from outside and cooking at home, with the former costing 3.6 to 4 times more. However, as this gap narrows to about 1.6 to 2.2 times, the convenience of buying food from outside becomes more attractive. This shift is expected to drive further growth in the food service industry.
The convenience factor is further enhanced by innovative solutions provided by some new-generation food platforms, making it easier for consumers to access high-quality, ready-to-eat meals at competitive prices. These platforms are leveraging technology and scale to bring down costs, making eating out or ordering a more feasible option for a larger segment of the population.
Food for Thought
As we navigate through our busy lives, the convenience of having high-quality, ready-to-eat meals at our fingertips becomes increasingly appealing. With rising incomes and changing lifestyles, the food and groceries sector is transforming before our eyes. From splurging on dining out to embracing the ease of ordering in, consumers are driving this growth with their evolving preferences.
New-age one-stop shops for Indian sweets are playing their part in this delicious revolution, offering innovative solutions that make our dining experiences even sweeter. These ventures are not only meeting the demands of convenience but also ensuring that we don't have to compromise on taste or quality. So next time you find yourself deciding between cooking at home or trying something new, remember that the food industry's exciting evolution has plenty to offer.
The aspirations of today's tech-savvy, fast-paced consumers are now the driving force behind retail success.
"It’s no longer just about products—it’s about people, purpose, and presence."
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