Why mall owners aren’t looking to chase footfall

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Published: June 5, 2020 7:22 AM

The Select group plans to open only 33% of the outlets

The group expects an 18-20% hit on its top line, says Arjun Sharma, chairman, Select GroupThe group expects an 18-20% hit on its top line, says Arjun Sharma, chairman, Select Group

After over two months of wait, shopping malls in certain parts of the country, including Select Citywalk in New Delhi, will resume operations next week. For once, says Arjun Sharma, mall owners will not be chasing footfall. He speaks to Devika Singh about the focus on crowd-management and safety, offering “reasonable” relaxations to retailers, and more.

With malls slated to reopen in some parts of the country, what are the challenges you are anticipating?

The biggest challenge will be crowd-control, as consumers have been staying indoors for more than two months now. We are already getting enquiries from people about when salons and stores will open. We don’t want a high footfall to begin with, as we are planning a calibrated reopening. In the initial few weeks, we will target only a fraction of the usual footfall that we used to get before the lockdown. On a weekday, for example, the footfall would be around 30,000; but we are targeting only one third of that number now. We plan to reopen only 33% of the outlets initially. We will use this time to understand how best we can put the standard operating procedures (SOP) in place for safety and hygiene. Because what we are facing is unprecedented, there is no roadmap available.

What are some of the safety measures you have implemented already?

We are following the SOP put out by the Shopping Centre Association of India. We are constantly deep-cleaning the centre and taking several measures for keeping the air conditioning process sanitised. We have created sanitisation tunnels, and people will be given a choice to walk through them. Although it is mandatory to wear masks, we will be giving out free masks to consumers who don’t have them. In a 1,000 sq ft store, only 10-12 people will be allowed at a time. We offer a more secure environment than open markets, where it is difficult to put these measures in place, and hence are a better choice for customers to shop during these times.

How will you offset the increase in operational costs owing to safety and hygiene measures?

There will be costs incurred in executing all the SOPs, but when you look at it from a long-term perspective, these are manageable. For example, we are spending more on health and hygiene, but the expenditure on marketing will go down, as we are not looking at filling the store with more people but rather managing it well. So, we will step back a bit on marketing to manage our budget.

What sort of relaxations have you offered to retailers who have been severely hit by lockdown?

To start with, we have not raised the rental invoices for the month of April and May; we have billed them only for the maintenance of the common areas. We don’t want to pressurise our tenants, as we know that they are facing liquidity issues. We are not going to adopt a one-size-fits-all approach; we’re looking at each retailer individually. Our approach towards a smaller retailer will be different from that of a big retailer with a strong balance sheet. Most retailers will need help for the first two-three months after the mall opens, depending on the category they operate in. For example, sales of retailers who sell occasion wears will be affected more than those offering comfort wear.

Most of our retailers want to defer their payments, that is pay in installments over the period remaining in their tenures. We have to figure out a reasonable time and amount for deferment, as we have to pay our dues to the banks, too, and don’t want to default on them. The reality is that shopping centres have also been hit and, so far, we have not been given any support from the government, except for deferment of our banking dues. Our industry has paid the dues over the years, and it is time the government helped us out.

How will the lockdown affect your FY21 revenue?

Our discussions with retailers are still underway, so we will be able to better predict by the end of June. We suspect that the impact will be more on the cash flow, than on revenue. We expect an 18-20% hit on our top line.

Read Also: How the M&E industry is likely to shape up post-Covid

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