Heavy Fall in Mall Sales and Shoppers

By Ayaan Khan

Nowhere has the impact of the credit crunch been more telling than in the temples of consumerism: malls.

Part of organised retailing, they have witnessed an alarming slump in sales in the last couple of months as a direct result of the declining number of consumers.
The older and more established ones are somehow pulling through, but the recent ones, leave alone make a profit, are nowhere near the break-even mark.

There has been a 20-50 per cent fall in the daily number of visitors and November had been a particularly bad time when sales almost completely dried up. Lifestyle at Begumpet, which used to buzzle with shoppers, is a case in point. Post-Diwali, the number of visitors to it has fallen by 30 per cent.

One of its senior executives said, ‘‘earlier, people used to splurge money..
now, they are far more careful. Although profits have not been affected, sales would have been better by at least 10 per cent if not for inflation and the credit squeeze.’’ The increasing insecurity, due to lay-offs, seems to have made employees rather circumspect.

Manoj, an IT professional, was a regular to the malls.

Not so these days. ‘‘We never know when we will get the pink slip,’’ he said on the reason for staying away from malls.

The number of customers also depends on the location of a mall. Road number 1 in Banjara Hills has a dense concentration of malls, making it hard for newer ones like Ashoka Metropolitan to attract customers.

Just nine months into the business, Ashoka Metropolitan, which boasts of Spencer’s, Reliance iStore and Music World among others, looks deserted.

Its parking lot is spread over four underground sections and can accommodate 320 four-wheelers. However, a few ‘stray’ vehicles, if that term can be used, are all that one can find in the parking lot. Ten per cent of the 40 stores in the mall are lying vacant and there are hardly any takers for advertising billboards.

Third Eye, a camera store, gets just 4-5 customers a day. ‘‘Earlier 25-30 would walk in daily,’’ said K Purushottam, the store manager. With business going slow, malls too are resorting to cost-cutting measures like reducing staff and withholding recruitment plans.

Since organised retail accounts for only 5-6 per cent of the retail market, there just isn’t enough demand.

To make matters worse, the downturn has coincided with the festival season. Vivek Nair, GM of Shoppers Stop in Begumpet, admitted that high-value sales like laptops and fine jewellery were down this time. The store, spread over 66,000 sq ft, has reported a 10 per cent drop in sales. ‘‘We typically rely on highvalue sales in the marriage season between Diwali and New Year, but that is down,’’ said Vivek Nair, who like many of his peers, is hoping that December will bring some relief.