India’s organised retail sector is incurring annual losses exceeding Rs. 2,000 crore (US $215 million) due to inefficiencies in internal logistics, even as last-mile delivery performance continues to improve, according to a report by ClickPost.
The study, based on data from 48 omnichannel brands, analysed operations across more than 15,000 stores and 7.2 million shipments between January 2025 and January 2026. It found that delays in moving inventory within retail networks are locking up working capital and adversely impacting sales.
According to the report, while retailers have become increasingly efficient in delivering products to customers, they continue to face significant delays in transferring inventory between stores and warehouses. These inefficiencies are largely attributed to manual processes and poor coordination, resulting in unsold goods remaining within the system for extended periods and reducing overall operational efficiency.
The issue becomes particularly pronounced during peak sales periods. In one instance cited by the report, a 150-store fashion brand saw the time required to return unsold inventory rise sharply from 0.2 days to 13 days during end-of-season sales. In January alone, the brand processed returns worth Rs. 6 crore (US $646,000), accounting for 72% of its seasonal inventory movement. However, delays led to Rs. 2.6 crore (US $280,000) being tied up as working capital. Even after the peak period, return timelines remained elevated at six days, indicating a persistent structural challenge.
The report highlighted that delays tend to intensify during sale cycles, when inventory volumes surge. Approximately Rs. 200 crore (US $21.56 million) was reportedly locked up during a single sale period due to delays in internal pickups, despite warehouses and logistics partners being fully prepared. Over the course of a year, such inefficiencies accumulate into losses exceeding Rs. 2,000 crore (US $215 million) across the sector.
A key contributor to these inefficiencies is the continued reliance on manual systems. The report noted that around 85% of brands still depend on emails and spreadsheets to manage internal logistics, making operations up to five times slower than automated systems. For large retail chains, this can translate into delays of up to two weeks and losses of Rs. 40–50 lakh (US $43,000-US $54,000) per sale cycle, with cumulative losses exceeding Rs. 1 crore (US $107,000) over time, excluding missed revenue opportunities.
Performance disparities between manual and automated systems were also evident. Manual processes achieve only 30%–40% successful pickups on the first attempt, compared to over 90% for automated systems.
The challenge is further compounded by shrinking fashion cycles and increasing operational complexity. Product cycles have reduced from around 90 days to 15–20 days, leaving minimal margin for logistical delays. By the time inventory reaches warehouses, consumer demand may already have shifted.
At the same time, sale periods now see volumes increase three to four times, placing additional strain on supply chains. Modern retail networks involve multiple nodes, including stores, warehouses and distribution hubs, making coordination increasingly difficult without technological integration.
Operational inefficiencies are also reflected in routine processes. Invoice errors occur in 10%–15% of cases, resulting in approximately 1,500 disputes each month and requiring teams to spend nearly 65 hours daily on resolution. Delays in inventory movement also lead to an estimated 8%–12% loss in potential sales during peak periods.
The report suggested that improving internal logistics could become a critical growth lever for the retail sector. It indicated that brands continuing to rely on manual systems are losing between Rs. 5 crore (US $539,000) and Rs. 15 crore (US $1.62 million) annually due to inefficiencies, underscoring the need for greater automation and coordination within supply chains.
