Retailers on terror edge
Every time there is a terror attack, it’s bad news for shopping malls and large retail outlets that not only see a drop in visitors and sales. Saurabh Turakhia reports.business Updated: Jul 28, 2008 20:41 IST
Every time there is a terror attack, or a threat of one, it’s bad news for shopping malls and large retail outlets that not only see a drop in visitors and sales, but also come under greater scrutiny of security agencies.
The serial bombings in Bangalore and Ahmedabad through Friday and Saturday hit weekend sales at retail hubs of these two cities as several shopping malls were ordered to shut early and people were kept away fearing more explosions. Retail trade was also hit in other parts of the country, but to a lesser extent.
“There has been a definite fall in business especially in areas such as Bangalore, Ahmedabad, Gujarat and Surat,” said Rajan Malhotra, CEO of Big Bazaar. “We were asked to shut our stores early in Indore and Surat. Overall, there was a 10 per cent fall in business as apart from fear psychosis, business also got affected due to heavy rains in many major cities.”
Grocery and food retailer Subhikha saw a 20 to 30 per cent drop in footfall at its stores in Bangalore and major cities of Gujarat, but elsewhere business was as usual, said R Subramanian, managing director of the company.
Vishal Retail, which is mostly into apparels and home furnishing, said its sales were down 20 to 30 per cent compared to a normal weekend.
The drop in visitors is the most immediate impact, but in the longer run retailers have to step up security-related spending, including insurance cover against terror attacks.
“We spend close to Rs 14-15 crore on security every year,” said Subramanian. “We also have an insurance policy in place worth about Rs 1,500 crore.”
Shoppers Stop, which has not yet taken any specific insurance policy against terrorism, said it is reviewing its security needs. “We have made all the necessary investments we needed to for purpose of security,” said BS Nagesh, managing director of the company. “We will be in discussions today to take appropriate decisions to beef up security.”