Entertainment and Food & Beverage (F&B) outlets are fast becoming the new mall anchors replacing large departmental and apparel stores in leading malls across the country.
Entertainment and Food & Beverage (F&B) outlets are fast becoming the new mall anchors replacing large departmental and apparel stores in leading malls across the country. As Vishal Mirchandani, CEO, Brigade Enterprises, observes, thanks to online shopping having taken off, cinema halls and restaurants have become key
differentiators for mall developers. Consequently, their share of space has gone up from just 8%-9% a couple of years back to 20% now, a Knight Frank India report notes. In some new malls — DLF Mall of India located in Noida and GVK One in Hyderabad — they’re taking up as much as 40%-50% of the space.
In fact, almost all the top 10 best performing malls — those that have a vacancy of less than 10% — have now leased more than 20% of the space to film theatres, entertainment spots and restaurants. These include Select City Walk, Oberoi Mall, Infiniti, Orion, Inorbit and Phoenix Market City. “Earlier, people came to a mall primarily to shop and then perhaps get a meal but increasingly, that order seems to be reversing,” Mukesh Kumar, vice-president at Infiniti Mall, Mumbai, said.
The ease of shopping on the internet and the attractive discounts has meant consumers often visit stores only to get a better idea of the product, making the purchase online. “Malls do get visitors who may be window shopping but, on an impulse, might watch a film or eat out. So mall-owners are catering to these needs,” points out Arvind Singhal, chairman and managing director at Technopak.
Typically, F&B and entertainment outlets occupy less space than apparel or department stores and are housed in the upper floors of a mall, which means they pay lower rentals as well. The average departmental store is now spread across 20,000-25,000 square feet; international apparel brands like Zara and H&M use between 15,000-20,000 square feet while F&B outlets are approximately 4000-5000 sq ft large.
Although spends at a movie theatre or a quick-service retaurant tend to be smaller than at stores, they’re more predictable and consistent, says Kumar, adding they support sales in other categories as well. According to Samantak Das, national director of research at Knight Frank India, footfalls at QSRs and movie halls may not be as high those ino an apparel store anchoring a mall. “However, conversions are high and more often than not, money is spent so allocating space to these outlets makes a mall structurally more efficient,” Das says.
This shift in the mall business is similar to that seen in more mature markets like Europe and the US in the early 2000s. Malls expanded to include indoor amusement parks, ornate movie theatres, bowling alleys, aquariums and in some cases, even ski slopes. Directionally, experts say, this could be the way forward here too, especially since big cities are starved of urban centres like public parks, museums, independent entertainment zones, etc. “I think the average space that will be reserved for entertainment and F&B will be 40% and about 30% for traditional anchors,” said Das.
According to a recent study by FICCI and KPMG, films and the gaming sector are expected to grow at a CAGR of 10% and 14.3% respectively in the next five years. The entertainment market is currently pegged at Rs 5,240 crore but the penetration is just 13%, the Knight Frank report said.
“India is a very under-screened nation with just nine screens per million people, including single screens,” explains said Alok Tandon, CEO at Inox Leisure, pointing out that only 2 billion tickets are sold every year although India produces the largest number of movies. A JLL India report estimates that in the nest two years, 15 million sq ft of new mall supply is expected across cities, which means for those wanting to foray into the space, space will not be a constraint.