The commercial retail sector has begun to feel the pinch of economic slowdown. High rentals in up market locations in Punjab and Chandigarh are forcing retailers to go slow on expansion and to shut down inefficient stores.
With glitzy shopping malls witnessing lower footfalls, some are even looking to relocate themselves to affordable locations. For instance, most of the retail space remains unoccupied at the DLF mall cum multiplex at Rajiv Gandhi Chandigarh Technology Park (RGCTP) and at the Centra Mall in industrial area of the city. Paramount Surgimed Ltd has recently vacated two retail stores for its fashion brands Axara and Saboori Collezione from the DLF mall cum multiplex.
Shaily Grover, managing director of Paramount Surgimed Ltd, said, ?Initially the response was good but slowly the sales started coming down. Eventually we had shut down but we are looking for suitable place now to relocate ourselves.? He says that half of the retail space in the mall has been lying vacant with most retailers shelving their expansion plans. Nearly 55 national and international brands were supposed to open their stores, but half of them did not turn up.
Ludhiana, the industrial town of Punjab and the hub of retail expansion, too is showing signs of a slowdown. Jaspal Arora, general manager with Flamez Mall-cum multiplex in Ludhiana said that footfall has come down by 25-30%. ?The impact of the economic slowdown is going to stay for another six months. We have 38 retail shops, but brands including CTC Plaza, Cotton County and Liberty have quit as margins fell. Seven shops are lying vacant. We are hoping that situation will get better by the end of this year.?
DS Sachdev, director of Ansal Colonizers & Developers, which is present in the retail and real estate sector in Punjab, said, ?Economic slowdown has certainly impacted the premium and weak brands. Mass scale brands are doing well. As far as our company is concerned we have not seen downfall in footfall at our malls especially in Punjab. We are facing the pinch in Bangalore and Gurgaon.?
Leading rice producer REI Agro, which entered the retail sector of Punjab, Haryana and Chandigarh with five retail stores, 6Ten, has shelved plans to add 50 more stores in the north. A senior official of REI Agro said, ?Big retail has soured as the global downturn has deepened. We planned to open 580 stores but the situation has turned bad which has forced us to close down 80 inefficient stores. We are facing a liquidity crunch and margins are down. Moreover we could not get the expertise to run our retail chain.?