With the changing demographic features and improvement in quality of life of urban India, the Indian retail sector is witnessing a tremendous growth. As per AT Kearney's annual Global Retail Development Index (GRDI), 2010 India is ranked third in the list of most attractive market for retail investment. The retailers are now selectively focusing on smaller cities/emerging cities of India like Chandigarh, Ludhiana, Jaipur, Lucknow, Kochi, Nagpur, Indore, Nasik, Bhubaneswar, Visakhapatnam, Coimbatore, Mangalore, Mysore and Thiruvananthapuram. The emerging and potential cities are projected to contribute significantly to retail revenues. Although organized entered the tier II cities of India in early 2000, their growth has been modest during this period . This prompted a study to establish the potentials of emerging cities for the growth of retailing with the focus on consumer preferences and behaviour. Further, since these cities were dominated by traditional retailers, the study also attempts to establish the impact of organized retailers on unorganized sector with respect to the purchase behavior consumers of food and grocerY.