Shopping centres and malls in India had incurred losses to the tune of Rs 3,000 crore in April and May this year, when the second wave of the pandemic was raging, according to the Shopping Centres Association of India. With the vaccination drive gathering steam and restrictions being lifted in most states, shopping malls are hoping for the tide to turn this festive season.
Anand Ramanathan, partner, Deloitte India, says, “The festive season in India usually accounts for 30-40% of annual business for retailers and shopping malls.” Malls are pinning their hopes on the positive consumer sentiment to translate into recovery in footfall. For instance, DLF expects its footfall to go up to 80-90% of pre-Covid levels during the festive season, while Select Citywalk and Ambience Mall expect footfalls to reach the pre-pandemic levels.
Set to rebound
Pacific Mall, which currently operates five malls in India, expects to cross the sales number of FY 2019-20 during this festive season. It plans to open malls in Delhi, Faridabad and Dehradun. Abhishek Bansal, executive director, Pacific Group, says, “Footfalls are back to 70-75% of pre-Covid levels due to which business is accelerating. The pent-up demand among mall visitors is visible, and it will lead to better performance during the festive season.”
DLF has added over a hundred new brands to its retail portfolio across categories since January 2021. Its sales are back to about 95% of pre-pandemic levels, while 50% of the footfalls have returned. Inorbit Malls plans to add brand stores like Just in Time, Sports Station, Social and W-Lounge in its malls. Naviin Ibhrampurkar, head of marketing and corporate communications, Inorbit Malls, says the mall chain expects the festive season to boost the demand for ethnic fashion, electronics, skincare and cosmetics categories.
Select Citywalk has added 20 new stores, including those of food brands such as Sassy Begum and Haagen Dazs, and others like Decathlon and Crocs in FY 20-21. The mall has seen an increased uptake in categories like electronics, beauty products and athleisure. “We have seen growth in footfall in July-September and expect to be at pre-pandemic levels soon,” says Yogeshwar Sharma, executive director and CEO, Select Infrastructure.
Malls are investing in promotional activities ahead of the festive season. Select Citywalk is arranging events and pop-up stores; Ambience Mall has initiated a loyalty programme; while Pacific Mall is promoting its stores and F&B outlets via videos on social media.
Winning over shoppers
According to Deloitte’s State of the Consumer tracker, 50% consumers in India prefer shopping online across most categories. Analysts suspect it would be difficult for malls to convince consumers to come back to brick-and-mortar stores, like they did pre-pandemic.
“Malls in cities such as Delhi, Bengaluru and Chandigarh are reporting a better turnout and recovery, with sales reaching close to 70% of pre-pandemic levels,” Ramanathan notes. Complete recovery, he adds, will depend on when and how the rest of the country opens up, the state of vaccinations, the festive season and initiatives taken by malls and brands to attract shoppers.
The SOPs (standard operating procedures) issued by some states mandate that the staff in shopping malls as well as visitors need to be fully vaccinated. This could, analysts say, affect footfall, as the pace of vaccination across states is different. “Furthermore, apprehensions surrounding the third wave of Covid could also keep consumers away from shopping malls,” says Natasha Trikha, analyst, Industry Research, Care Ratings.
To cope with these inevitable challenges, malls and shopping centres have been experimenting with concepts like ‘store on wheels’, tie-ups with residential societies, online sales, and hyperlocal deliveries.