This paper attempts to study whether the various marketing challenges dealt with by the retailers are hampering the growth of retail trade in Tamil Nadu. In the total retail sector in India, the organized retail format has been growing very fast comparatively to the traditional unorganized retail formats. Now a day, the modern retail business formats have not only seen in well established metro and urban cities and also decorating in semi-urban areas. Although this modern organized retail business formats bring remarkable development in the Indian retail industry, it’s a major threat for survival and further development of unorganized retail business formats. By the rapid development of modern retailers, the unorganized retailers face several challenges, among those marketing problems are considered as one of the main challenges for the growth of the small unorganized retail stores. In this circumstance the paper examines some of the key marketing problems facing by the small unorganized retailers. 300 sample respondents selected across the Vellore district by stratified simple random sampling method. The study found that heavy competition, high risk, advertisement cost, packing and delivery expenses and non availability of place are some of the vital challenges encountered by the unorganized retail traders. 

Key words: Marketing challenges; Modern retail format; Unorganized retailers.