Abstract Grocery stores play an instrumental role in the lives of people and it is primordial for firms to know what consumers expect and perceive from these stores. Service quality is mainly focused on meeting the customer’s needs and also how good the service offered meets the customer’s expectation of it. In grocery stores, it is very difficult to evaluate intangibility because their activities are centered on the physical products. The marketplace is becoming increasingly challenging for companies because of more intense competition among the retail sectors organized and unorganized and more demanding customers. Considering the competitive environment, there is a need for a retailing strategy that differentiates one retail store from another. This can be achieved through the delivery of high service quality. Therefore it is very important to analyze the service quality of both organized and unorganized retail sector to know the gap what the consumers expect and what the retailers serve. In this research, the consumer’s expectation as what consumers think, should be offered by the ideal grocery stores and consumer’s perception will be defined as what they experienced in the grocery stores and this is assessed after the performance. It is difficult according to previous studies to measure service quality because of its intangible nature and as it deals with expectations and perceptions of consumers. Also this is justify to determine due to the complexity of human behaviour. This research governs and suggests the service providers to determine the level of intangibility of services and try to include tangible elements that could aid understanding of expectation from the consumer’s perspective. This research may provide detailed information about Customer perceptions of services provided by the organized and unorganized retail sectors, service performance levels as expected by customers, customer opinions and suggestions to fill the gaps of customers’ expectations and satisfaction.