The trend of online shopping is expending its roots throughout the world. In India the traditional retail market is in trends. Retail market contributes more than 10 percent of the GDP to the Indian economy. With the inception of Information Technology the trend of online shopping is also being famous in India. Spread of internet has made it easy to do the online shopping. This trend is famous especially among youth. Customer satisfaction is one of the important and challenging issues both for the online and traditional retailers. In this paper an attempt has been made to study the customer preference for online shopping and its impact on traditional retail market. To conduct the present study a sample of 100 respondents were selected among the traditional retailers. These samples were taken from the capital city traditional retail market of Shimla, Himachal Pradesh with the help of convenient sampling technique. Besides this 200 sample respondents were selected among the online buyers. The buyer respondents were taken from Himachal Pradesh University, Shimla with the help of random-cum-purposive sampling techniques. Both primary and secondary data were used for the study. The results of the study reveal that there is a negative impact of online shopping on traditional retail market.