Shopping malls, it seems, have run out of favour with retail brands, who are increasingly eyeing high street locations for expansion. Top retail and QSR(Quick service restaurant) brands such as Starbucks, Pizza Hut, KFC, Biba, Lenskart, Zudio and more have recently closed lease deals at prominent high street locations in the country, revealed Anarock Retail.
“Between April 2020 and May 2021, some of these brands closed over 120 lease deals at prominent high street markets across Indian cities and towns,” said the real estate services company.
The deal sizes ranged for areas as low as 400 square feet and went all the way up to 35,000 square feet, it informed.
Even large-format stores like Pantaloons, Westside, Zudio, Reliance Trends, and Max, which are typically known to have a presence in shopping malls, are scouting for space in high-street locations.
According to Anarock Retail, apparel had the largest share of deals with an over 23 percent share, followed by food and beverages with a 15 percent share, and jewellery with 12 percent. “Hypermarkets and supermarkets mostly leased large high street spaces in smaller towns and cities.”
“High street markets have been doing very well in these post-pandemic times and we are seeing many retail brands eye these locations as part of their expansion strategy,” said Pankaj Renjhen, COO and Joint MD, Anarock Retail.
“High streets offer a good opportunity with attractively low start-up time, lower cost of operations, and less dependency on immediate adjacencies,” he added.
The top cities where leading brands expanded in this period include Bengaluru, Pune, Hyderabad, Delhi, Chennai, Mumbai, and Gurugram. The prominent tier II and III cities include Lucknow, Ahmedabad, Chandigarh, Patiala, and smaller towns in Uttar Pradesh and Madhya Pradesh.
In another major trend, prominent hypermarket and supermarket brands are going deeper into tier II, III, and IV cities.
“Many of these smaller towns and cities offer high revenue-growth potential for these brands. Previously, most of the smaller towns and cities depended on mom-and-pop stores for their daily grocery needs,” said the report.
During the period, brands such as MORE Retail Ltd. mostly leased large areas in smaller cities like Agra, Faizabad, Muzaffarnagar, and Sitapur in Uttar Pradesh and Bhubaneshwar in Orissa.
"Going forward, with limited quality retail stock coming up and in smaller cities' convenience as a key parameter, high streets are a viable solution for retailers to bridge the gap,” said Pankaj Renjhen.