Apparel, F&B drive 54% of leasing in H1 2025 as millennials and Gen Z shape India’s retail future

India’s retail real estate is undergoing a dynamic transformation, driven by shifting consumer behaviors and preferences—particularly among Millennials, Gen Z, and even Gen Alpha. These generations are redefining retail by prioritizing convenience, digital integration, and meaningful brand experiences.

According to the latest research by ANAROCK, apparel and food & beverage (F&B) brands have emerged as the two dominant retail categories in terms of leasing activity.

Together, they accounted for 54% of total retail leasing—roughly 2 million sq. ft.—across the top seven Indian cities in the first half of 2025.

This marks a sharp rise from their combined 37% share in 2023, signaling a significant shift in expansion strategies across the retail landscape.

“Individually, the leasing share of apparel—currently the top leasing category—has declined from 42% in FY19 to 37% in FY25 and is expected to fall further to 32% by FY30,” said Anuj Kejriwal, CEO & MD of ANAROCK Retail. “On the other hand, F&B has grown from 8% in FY19 to 12% in FY25, and we project it will rise to 16% by FY30.”

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Online disruption vs. experiential consumption

The decline in apparel leasing reflects broader pressures faced by traditional retail formats—particularly from e-commerce and the rise of quick commerce.

Value-based segments such as hypermarkets and fast fashion are increasingly losing ground to digital alternatives that offer doorstep delivery and competitive pricing.

In contrast, experiential and high-value categories such as F&B, beauty and wellness, sports, and jewellery are gaining favor. “Jewellery, for instance, grew from a mere 2% leasing share in FY19 to 5% in FY25, and is forecasted to hit 13% by FY30,” Kejriwal added.

These changes reflect evolving customer expectations. While older generations prized trust and brand loyalty, today’s consumers demand personalized experiences, fast service, and emotional resonance—often driven by what they see on social media and digital platforms.

H1 2025 leasing snapshot

Among the 2 million sq. ft. of net retail absorption in H1 2025:

• 33% was taken up by apparel brands
• 21% by F&B
• 16% by entertainment zones
• 11% by home & lifestyle brands

This distribution highlights the changing priorities of both retailers and consumers, as malls and retail spaces pivot to include more experiential zones and diversified offerings.

The future of retail is personalized and tech-driven

The data clearly shows how Indian retail is realigning with today’s customer habits and preferences. While previous generations valued brand loyalty and word-of-mouth recommendations, Millennials and Gen Z value convenience, personalization, and emotional connection.

“We can see an unequivocal preference for quick, customized, valuable experiences clearly influenced by digital platforms and social media,” says Kejriwal. “This change is pushing retail beyond traditional stores to tech-enabled, customer-focused formats. The aspirations of today’s tech-savvy, fast-paced consumers are the key to retail success now.”

As technologies like AI, automation, and sustainable retailing gain prominence, the role of physical stores is being redefined. Retailers must now go beyond transactions to create meaningful connections with their audience. Flexibility, storytelling, and purpose-driven branding are fast becoming the cornerstones of modern retail success.

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