Following are the reasons behind the failure of Subhiksha:
1. Rapid store expansion in various formats like groceries, medicines, mobiles, electronics, consumer durables and IT without sufficient fund in hand.
2. Operated on very slim or zero margins resulting in higher cash outflow whereas inflows were almost nil.
3. Not much attention to customer service resulted in bad quality service at store level.
4. Downstream supply chain was not integrated resulting in lower fill rates and customer dissatisfaction.
5. Expanded business through debt.
6. The company did not have enough funds to manage its operations.
7. Poor inventory management resulted in defective inventory, breakages, lower fill days and pile up inventory.