Shopping Malls to see 35% decline in footfall

Hyderabad: Shopping malls, which are already suffering from large vacant space, is expected to see a sharp decline of 35-40 per cent in footfalls in the ongoing festive season as economic slowdown, high interest and job uncertainties have dampened the shopping spirit this year, reveals an ASSOCHAM (provides a forum for dialogue between business and government) recent survey.

The survey stated "Shopping malls failed to draw footfalls this festive season' indicating that economic slowdown, galloping inflation, interest rates have upset the festival shopping plans of all the consumers this festive season.

ASSOCHAM team interacted with about 650 leasing managers, representatives of malls' management, strategist, marketers and supervisors in Delhi-NCR, Mumbai, Ahemdabad, Chennai, Kolkata, Hyderabad, Chennai, Bangalore, Chandigarh and Dehradun.

The shopping spirit was found to be at the lowest ebb among Delhiites (33%), followed by Ahemdabad (31%), Chennai (30%), Mumbai (28%) and Hyderabad (27%).

Commenting on the trend, D S Rawat, Secretary General ASSOCHAM said, 'the trend is on expected lines as the economic recovery is rather slow and consumer confidence low."

As per the ASSOCHAM estimates, roughly 250-300 malls came up in the country over the last two years but 70-80 per cent of the spaces in these malls lie vacant. The economic slowdown has landed especially heavily on the shopping malls.

The survey further reveals that the slowdown, job cuts and devaluation of the rupee against the dollar is also making imported raw material and finished goods costlier. It will also impact consumer spending in a significant way.

The numbers of malls across the country, unable to justify the rents they charge tenants, are shutting down. The currency fluctuation is a major challenge for the consumer electronics industry because the imported consignment is coming at a higher cost.

The dinnerware and cookware companies have already started offering attractive offers and discounts to boost sales, adds the ASSOCHAM recent survey.

More than 47 percent of the total mall space in nine cities is vacant, the survey found. In order to lure retailers, many developers started giving rent-free period for up to six months for big brands.

While some malls are operating at 60 percent occupancy, others are struggling with less than 20 percent. The report said the industry was also facing problems like multiple taxes, lack of clarity in policies and shortage of experts in areas such as supply chain and store management.