India is second largest producer of fruits and vegetables in world. India produces about 14% of world’s vegetables from 15% world’s area. The vegetable productivity in India is less than the world average productivity. Nearly 30-40% vegetables were wastage during the supply chain i.e. reaching from producer to consumer. Most of the marketing of vegetables in India is done in unorganized sector and very little quantity is marketed through organized sector. Present study was an attempt to study the marketing channels and to examine the marketing efficiency of organized retail chain. The Varanasi district of Uttar Pradesh was selected purposively for the present study. Spencer retail Bhelupur was selected purposively. A total of 45 farmers, 4 intermediaries, one retailer and 60 consumers were selected. Vegetables viz tomato, cabbage, pea, okra and brinjal were selected for the study. Among the organized supply chain i.e. channel II, the cost incurred per kg of vegetables was much lower than the cost incurred in the traditional supply chain i.e. channel I. In channel – I, the net return and marketing efficiency was higher for channel II than channel I for all the vegetables under study. At the same time organized supply chain was found to be smallest price spread. Hence organized supply chain (channel – I) was found more efficient as compared to unorganized supply chain (Channel – II). Hence it is advisable to the farmers to sell their produce through modern supply chain i.e. channel II as it is more efficient because the commodity was purchased directly from the producer.