BackMall retailers curb expansion plans as spending slow: DTZ report
High inflation and a slowing economy crimped consumer spending; DTZ plan to open new stores over long-term
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Bangalore: Mall retailers curbed expansion in the June quarter as high inflation and a slowing economy crimped consumer spending, a DTZ International Property Advisors report said on Thursday.
DTZ said retailers plan to open new stores over the long-term but a majority of the openings are not planned for the next 12 months.
“While continued high inflation levels have restrained consumer spending and delayed purchase decisions, the slowdown in economic growth and weak consumer sentiments have resulted in a sense of uncertainity amongst retailers, thereby putting expansion plans on hold," the report said.
Mall rents were largely stable in the quarter as large supply and high vacancy helped retailers negotiate favourable deals with developers, according to the report.
“Subdued demand for retail space also resulted in developers going slow on several under-construction projects. As a result, in (the quarter) the retail markets in India (in the national capital region, Mumbai and Bangalore), witnessed a restrained supply of new mall space," the report said.
Bangalore was the only major city to add mall space in the quarter, with three new malls or 1.3 million sq. ft of space coming up between April and June. Delhi and Mumbai saw no additions, the report said.
India’s economy grew at its slowest since 2003 in the March quarter, and high inflation and a deficient monsoon have added to fears of a slowdown in consumer spending.
“With uncertainty across Indian and global economies, growth in retail sector is likely to be restrained," the report cautioned.
“Most retailers are bullish on the long-term growth potential of retail industry in the country. Moreover, the upcoming festive season in the second half of the year is likely to provide some stimuli to the retail landscape in the country," said Anshul Jain, chief executive, DTZ India.
mihir.d@livemint.com
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