Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

Mall Fall: Why retail destinations are shutting in Narendra Modi's Ahmedabad

Sep 06 2013, 15:50 IST
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We had to shut our store, as our lease expired We had to shut our store, as our lease expired
Summary'We had to shut our store, as our lease expired.'

It’s Wednesday and Rakesh Patel, with his wife and two children, starts early to beat the rush at a Big Bazaar store at the Iskcon temple crossroads in Ahmedabad. On Wednesdays, “hafte ka sabse sasta din”, the store offers special discounts, attracting large crowds, and forcing cops to manage the traffic around it. But to the Patels’ surprise, the parking lot around the store is near-empty. The shutters are down, and the sign ‘Big Bazaar’ itself is gone. “When did this happen?” asks Patel in disbelief. The guard has no answer, as he directs the family to another Big Bazaar store. “We had to shut our store, as our lease expired, but we have taken measures to migrate customers of this store to the Big Bazaar in the nearby Himalaya mall,” says a spokesperson of Future Group, which owns the retail chain.

The end of a lease period may sound like a legal and one-off reason, but the fact is that the Future Group has closed down three stores in Ahmedabad since 2008, and is now left with just two outlets. The company insists it is in a “consolidation phase” and cites a plan to launch three new stores by the end of 2014 as an explanation that all is well.

But all is not well. Not just with Big Bazaar, but with most malls and super/hyper markets in Narendra Modi ruled Ahmedabad. According to global property consultants Jones Lang LaSalle (JLL), nearly 7 lakh square feet of retail space has closed down in the last three to five years in the city. The average mall vacancy (jargon for empty space in malls) in Ahmedabad is 33 per cent, the highest in the country. This is more than double that of the national average (15 per cent) and far above figures for other major cities like Hyderabad (0.45 per cent), Chennai (6.48 per cent), Kolkata (4.5 per cent), Bangalore (11.68 per cent), Mumbai (15.46 per cent) and Delhi-NCR (15.69 per cent). Also, while rentals in malls in Mumbai and Delhi-NCR grew by upto 19 and 10 per cent respectively between January and March this year, they fell by six to eight per cent in Ahmedabad.

This is a far cry from 2007, when Ahmedabad got the country’s first, and largest, hypermarket — a 1,65,000-square-feet Reliance Retail store that housed 95,000 products, at the Iscon Mega Mall. More than six years on, the hypermart

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