Amid the prevailing gloom and uncertainties of Indian economy in the days ahead, Diwali, arguably the biggest festival of the country, may turn out to be a damp squib. Industry chamber Assocham on Thursday said malls are likely to see a 35-40 per cent decline in footfalls.
Shopping malls, already dealing with the problem of large vacant spaces, may see a sharp decline in footfalls as economic slowdown, high interest rates and job uncertainties have dampened the shopping spirit this year, the industry body said on Thursday.
Assocham interacted with about 650 leasing managers, representatives of malls’ management, strategists, marketers and supervisors in Delhi-NCR, Mumbai, Ahmedabad, Chennai, Kolkata, Hyderabad, Bangalore, Chandigarh and Dehradun. The shopping spirit was found to be at the lowest ebb among Delhiites (33 per cent), followed by those in Ahmedabad (31 per cent), Chennai (30 per cent), Mumbai (28 per cent) and Hyderabad (27 per cent).
D.S. Rawat, Secretary-General, Assocham, said the trend is on expected lines as the economic recovery is rather slow and the consumer’s confidence low.
The slowdown, job cuts and devaluation of the rupee against the dollar is also making imported raw material and finished goods costlier.
A number of malls across the country, unable to justify the rents they charge tenants, are shutting down. 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, said the Assocham survey.
More than 47 per cent of the total mall space in nine cities is vacant. Delhi-NCR tops the list with 55 per cent of malls being vacant, followed by Mumbai (52 per cent), Ahmedabad (51 per cent) and Chennai (50 per cent). 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 per cent occupancy, others are struggling with less than 20 per cent. Vacancy levels are due to poor location, design and parking problems. It said the industry is also facing problems such as multiple taxes, lack of clarity in policies and shortage of experts in areas such as supply chain and store management.