As early shoppers step out, high street markets win over big malls
Retailers have witnessed tepid response since the lockdown restrictions were eased, with shoppers making short trips, spending less time and buying exactly what they need from stores on high streets. However, stores located in malls have fared even worse.
Retailers Mint spoke to said business in stores located on high streets were at 30-60% compared to a year ago, while in malls they were as low as 5-20%. In all, physical stores continue to bear the brunt of the covid-19 outbreak.
“Malls have opened only in some cities. Most malls have been sluggish in sales compared to high streets. However, it’s very early to comment, malls are just beginning to get their act together, they will start marketing their efforts to provide a safe environment in the coming weeks,” said Ritesh Ghosal, chief of marketing and insights, Infiniti Retail, which runs the popular Croma chain of electronics stores. Croma has 169 stores, out of which 55 are located in malls and 7 at airports. The remaining are on high streets.
Overall, consumers remain conservative about spending on items such as apparel, accessories, footwear, watches and beauty products, while electronics, furnishings and grocery sales are more encouraging.
Apparel retailer Madame resumed operations in over 70 stores on high streets, while 42 stores have reopened in malls. Before the virus outbreak, stores in malls contributed 45% of sales, but currently malls are contributing to 5% of total sales, while 95% is coming from high street stores, said Akhil Jain, executive director, Jain Amar Clothing, which owns the Madame brand.
That said, business is also slow in high street stores, Jain said, adding that year-on-year sales grew 32% in June. “Restaurants in malls are not yet open for dine-in and cinemas are shut. So consumers are not really going to malls.”
The concerns of brick-and-mortar store owners were corroborated in a survey by Retailers Association of India (RAI), which studied over 100 large and small retailers between 1 and 15 June. It said that retailers in malls reported a 77% year-on-year drop in business in the first 15 days of the month, while high streets saw business decline by over 60% during the same period.
However, malls said conversion rates in shopping centres remain strong, that is, shoppers who walked in bought something. Nimish Arora, director and interim CEO of New Delhi-based Select CityWalk mall, which draws the city’s affluent, said it has seen gradual increase in business. “Post the reopening of Select CityWalk, the numbers are steadily increasing. Most brands have seen higher conversions. With the reopening of business and work in times to come, the shopping centre will also see gradual increase in sales,” the spokesperson said. The mall reopened earlier this month with clothing, personal care and grooming, and electronics seeing some level of pent-up demand.
Denim-wear brand Spykar said stores in malls are currently doing a third of business compared to high street stores. “I don’t see that changing anytime soon,” said Sanjay Vakharia, CEO, Spykar Lifestyles. In some cities, Vakharia said sales on high streets were back to 65-70% of last year’s business, but for malls it was not more than 20%.
The trend is more acute in cities where covid-19 cases are on the rise. “I would break up business into high streets and malls. The former has been decently stable, especially in cities where covid is not a high risk. But where there is a risk of infections, sales are down across stores,” said Siddhartha Bindra, managing director, Biba. He added that business in malls was just 10-15% compared to a year earlier. “People are not feeling safe visiting crowded places. Malls have taken tremendous precautions. I think once people start visiting malls, they will feel secure.”