Time spent per consumer at malls has dropped to an hour or less against two to three hours during regular times.
It has been over a month since shops and malls re-opened, however, business is dull. In some cities and towns, localised lockdowns have left consumers unable to leave their homes.
Muhammad Ali, COO, retail division at Prestige Group, said want-based buying that drives 80% of the business has been lost and will not resume until there is a vaccine or cases drop considerably. “Buying is happening, shopping is not,” Ali told FE.
Time spent per consumer at malls has dropped to an hour or less against two to three hours during regular times. Footfalls during the past five weeks of operations stood at barely 20-25% of the same period last year while business has been about 40-50%. The group’s malls were hoping to launch ‘end of season sale’ (EOSS) starting July 15 but it has now been shifted online for major markets like Bengaluru due to lockdown in Karnataka. “Due to the lack of physical shopping, sales will not be that impactful. However, better footfalls are anticipated post July 22 as brands will offer discounts never seen before,” Ali said. For the sector, EOSS — that typically happens twice a year drives 40% of the annual business. The festival spike has vanished since long and buying is restricted to ethnic wear during the period.
Sanjay Vakharia, CEO, Spykar Lifestyles, said business is currently being led by tier two and three cities — the stores, operating in batches, have generated about 18-20% of business year-on-year since June. Generally, high-street stores are performing better than the malls and purchases are being dictated by need rather than price.
“The footfall we used to have before the pandemic is not there anymore. Statewise things are volatile and the frequent lockdowns weigh on consumer sentiment,” Vakharia said. The company has implemented pay cuts and will prune additional costs wherever necessary.
Discounts are not “necessarily” driving additional footfalls but can only help in up-selling to the customers coming to the stores, said Alisha Malik, VP, e-commerce and marketing at Metro Brands. The company is betting on its e-commerce segment to revive business. While it will take at least two quarters for businesses to get back on track, consumer spending is expected to be limited even if the situation improves.
Umashan Naidoo, head of customer and cosmetics at Westside noted that easing of lockdown does not seem to help and customers are bound to not feel confident to step out and shop. The brand is hence, connecting with consumers through digital platforms.
Given that the lockdown in Delhi is currently restricted only to the containment zones, Select Citywalk Mall has witnessed a “steady upswing” in footfalls over the past few weeks. Nonetheless, the revival is nascent and full recovery will take time. The firm is hoping for cinema halls to open and has approached authorities seeking longer hours of operation, said director & CEO Nimish Arora. The mall currently operates from 11am till 9pm.
Ramesh Pandey, whole time director, marketing and events at Ambuja Neotia Group that runs the City Centre malls in the East said sales from non-essentials stand at a mere 25%. The company has just achieved 40% of its pre-lockdown sales and is pinning hopes on EOSS by Pantaloons and Shoppers Stop to “bring a decent amount of consumers to the malls.”
A recent survey by the Retailers Association of India showed retailers witnessed 67% degrowth in business from June 15 to 30 compared to the corresponding period last year. Malls witnessed 77% degrowth while high street retail showed degrowth of 62% during the period.