BackFestive sales boost mall revenues
Footfall and sales at leading malls in December ’20 recovered to 65-80% of the levels reached a year agoDevelopers are cautiously hopeful and are looking to reduce rents further going into the next fiscal
PremiumNEW DELHI : ndia’s top malls, which struggled as covid cases surged, said footfall and sales in December 2020 recovered to 65-80% of the levels reached a year ago, led by year-end festive buying, discounts, winter wear sales and even some resumption in dining in.
The recovery by DLF Retail, Inorbit, Nexus Malls, and Viviana Mall was led by electronics and home furnishings. “As compared to December 2019, we have recovered 65% of footfall and over 85% sales across most of the malls in our portfolio. We have seen a surge since the festivities have set in and people started shopping for traditional attire, beauty products, jewellery and electronics," said Dalip Sehgal, CEO, Nexus Malls, which operates nine properties in the country. “For December, our sales were up by 20% over November and the footfalls were up by 15%," Sehgal said.
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Rajneesh Mahajan, CEO of Mumbai-based Inorbit malls, which runs five properties in west and south India, said they saw a 65–70% recovery over December 2019. Thane’s Viviana Mall also saw 70% of its 2019 December footfalls in 2020. “The mall has seen 80% sales recovery in December as the average spend by the consumer has gone up," Gurvineet Singh, CEO, Viviana Mall, said. End-of-season sales are likely to drive business until 26 January, Singh said.
The road to recovery for malls has been patchy as many of them have seen staggered opening with their cinemas being the last to be permitted to operate. Consumers, meanwhile, are avoiding long-distance travel to shop and are choosing to buy goods online or at stores closer home. They are also not spending as freely as before. The recent night curfews levied across states following reports of a more contagious strain of the coronavirus also hit business last month.
Developers said it could be months before they go back to 100% business. “It is difficult to recover businesses with different sets of regulations across different cities," Sehgal said. Retailers, on the other hand, have had a choppy year. Apparel retailers may have suffered a 40-45% decline in full-year revenue in the current financial year, estimates by India Ratings and Research suggest.
In northern states, cold winters helped retailers sell high-priced jackets and woollens. This was seen in brisk sales reported by brands such as Uniqlo, Marks & Spencer, Zara, and H&M, mall executives said. “Footfall during the week of Christmas and New Year’s in certain properties was equal to 80% or 70% of 2019, so it was that good. This crowd gives us an understanding of how the mood is changing," said Pushpa Bector, executive director, DLF Shopping Malls, which operates several properties in Delhi-NCR.
Footfalls also translated into spends spurred by the early onset of discounts, Bector said. “End-of-season sales began between 12 and 15 December and winters set in drastically. So, brands with winter merchandise got a quick lift," she said. The discounting was “deep and genuine", she said.
However, developers remained cautiously optimistic on demand and said they are not looking to reduce rents further going into the next financial year. “We waived off all rentals between April and August. However, for September and October we asked retailers to pay 50% of rents. From November we are charging 100% rents from retailers," said Singh. With restaurants opening later than other tenants, the mall sought 12-15% share of the revenue in October to December. “From January even restaurants have been asked to go back to the original rentals. The tenants don’t have a problem," he said.
A top executive with a leading foreign brand said that offline business has been tough, making a case for sustained rental negotiations. “We need reduction till August as vaccination of the country will take more time," he said speaking to Mint on the condition of anonymity.
(Shuchi Bansal contributed to this story)
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