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Hard Times

Due to dropping footfalls and sales, many retailers are quitting malls. Even restaurants here are going empty. Is it the end of the mall mania or is there something wrong with the malls themselves? Manoj Sharma examines...

entertainment Updated: Jun 28, 2008 22:01 IST
Manoj Sharma

It’s 6 p.m., the sky is overcast, and the roads are washed out. It has just rained in Gurgaon. But MG Road is lit up. There are glittering glass and steel malls on both sides — a setting to inspire any photographer of urban landscape. On the face of it, the place looks like a shopping Mecca. It could give Oxford Street a run for its money. You enter the malls, and it’s a different picture though. It’s all peace and quiet. You could call it dull – and it wouldn’t be unkind.

A few youngsters are hanging around and most shopkeepers are reading newspapers, or chatting with their staff. It’s the same scene in most malls of Ghaziabad and Delhi.

Till a few months back, the shopkeepers in the malls would complain that huge footfalls were not converting into sales. Now they say there’s a steady drop in footfalls too. Sales are so bad that retailers are quitting malls. Vacant shops with ‘For rent’ notices are common. In fact, two malls in the NCR are reportedly being converted into office spaces. Few others may follow suit soon.

“Sales have been dropping at a terrible rate. Many of my neighbouring shops have downed their shutters,” says a salesman at a garment shop in Ansal Plaza, Vaishali, Ghaziabad. Even restaurants here are facing hard times. There is hardly a food court that does not have gaping holes because vendors have left. “Business is going down by 15-20 per cent,” says KN Umesh, manager, (Operations) The Yellow Chilli, at Pacific Mall, Kaushambi, Ghaziabad.

He blames declining business on poor mall management. “The management should sit down with retailers and regularly organise shopping festivals. If shops are not doing well, it is the mall’s reputation that is also affected,” says Umesh. But BP Dhaka, COO, Parsvnath Developers, blames, not surprisingly, the retailers. “Bulk purchase works best in India. Retailers should keep that in mind. One of the reasons for malls losing business is that the curiosity element about them have vanished,” he adds. <b1>

Harshvardhan Neotia, managing director, Bengal Ambuja, a prominent developer in Kolkata, feels both developers and retailers have an equal role to play in the mall’s success – and failure. “It’s a partnership. Factors such as design, infrastructure, location, and events too play a role. So far, there are only four malls in Kolkata and they are doing well. But I am not sure what will happen when there are more malls in the city.”

Problem areas in the malls are many: wrong locations, wrong tenant mix, lack of promotional and marketing strategies, lack of open spaces. Says Pranay Vakil, chairman, Knight Frank India, a real estate consultant: “What most developers do not understand is that mall management is a science. India is a price sensitive market. There are two kinds of mall: one where people come to spend and the other where people come to save money. So, a mall should have the right mix.” Agrees, Amitabh Taneja, convener, India Retail Forum: “Mall developers have to understand the difference between real estate and retail real estate. Malls should be developed as social spaces, they should not merely serve as shopping areas.”

Are malls offering the same things? Neetu Gupta, 34, a Delhi-based teacher admits visits malls just for discount shopping from stores such as Big Bazar. “You get the same stuff in all the malls,” she says.

Neotia says developers’ hands are tied. “Not all the brands we approach are willing to come,” he rues. The lack of retail brands in India has also affected business. “Most malls in India were built in anticipation of the arrival of multi-brand retail chains such as Wal-Mart, which has not happened because of government policy,” says Vakil.

“Our shop in CP is doing hundred times better than here,” says a salesman at the Snowwhite Square outlet in a Ghaziabad mall. There is also the issue of mall design. Rishi Kumar, a media professional, says he feels suffocated in malls. “Most are like rat traps without any open spaces,” he says. (Recently, The Economist wrote an obituary to indoor malls in the US, where it said more and more people are moving to open-air lifestyle centres and retail spaces.) “About 22,000 people visit our mall everyday, and on weekends this number is around 30,000. There has been no drop in the number ever since we opened. We have lots of open spaces with fountains and it plays a key role in attracting footfalls to our malls,” claims Nithin Luthra, vice president, (operations), Select City Walk, Saket.

But K.T. Ravindran, Head, Department of Urban Design, School of Planning and Architecture, Delhi, does not want to overstate the role of design in a mall’s success.

So, will malls survive in India? At present there are about 150 of them all over the country. In the next two years, 300 new malls were supposed to be built. That number is not likely to cross more than half, developers say. If malls are allowed to be open till 2 a.m., it will improve business, says KN Umesh. Aditya Kumar, 33, an advocate and a regular mall crawler, believes family entertainment centres is the way for malls to go. “After all, they have taught us to hang out.”