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Malls report multi-crore losses in second wave as shop owners shut down for good
Shopping malls in the city, which have only operated at full capacity for four months since March 2020, have suffered crores of rupees of losses in the second wave
Shopping malls in the city, which have only operated at full capacity for four months since March 2020, have suffered crores of rupees of losses in the second wave. Shop owners have had to close down for good jobs due to the situation.
December 2020- April 3, 2021, is the period when malls across Pune functioned at full capacity. The had opened partially from August 2020.
The government has now relaxed restrictions for standalone non-essential shops, though curbs continue for establishments within malls.
Mukesh Kumar, chairman, Shopping Centres Association of India (SCAI), said that the number of shops that have had to close down is still very small. Most brands can sustain losses. Only in a few cases, owners have completely shut their business. In malls, most of the time, old brands exit and new ones arrive.”
Shops in malls get financing under a LRD scheme (lease, rental discounting), which allows them to repay loans.
“Generally shop owners get a space on lease in malls for 59 months (five years). Those whose contract is over, unfortunately during Covid, and s/he doesn’t want to renew, then the mall can do nothing. In a few cases small shop owners whoses business completely depends on footfall are winding up. The same owner will return when business peaks. This happened last year when an owner returned to set up shop in December,” said Arun Arora, centre director, Pheonix Market City.
Raj K is a travel agent who had set up a shop in a mall near Kharadi. He said, “I was getting no booking since people avoided travelling, so I shut down my shop. The mall owner handled the situation very well.”
“Due to lockdown many international brands have completely shut their operations in India, so these shops are closed now and replaced by others,” added Arora.
Most restaurants in malls have survived and are continuing to do deliveries.
SCAI is hoping that malls will soon be given permission by the government to restart operations.
“Crowds gathering in malls is a myth. Everything is sanitised at the malls and well organised. We monitor how many people are entering the shops, washrooms, and track social distancing – these are few characteristics that make malls safer places. We are also figuring out how to vaccinate all the employees of malls,” said Kumar.
Kumar Rajagopalan, CEO, Retailers Association of India (RAI), said, “While it is imperative to get the last-mile workers in retail vaccinated on priority, it is equally important to ensure that the entire cost of the shutdown is not borne by the business alone. We do believe that the state government, the central government, the Reserve Bank of India and the banks also have to chip in to soften the blow of the pandemic to businesses and the economy.”
Facts of the matter
Number of malls in Pune: 20
Total loss incurred (second wave): Rs1,300 crore
Total number of malls in Maharashtra: 75
Source: Shopping Centres Association of India (SCAI)
