With the onset of the festivals, sales in shopping malls are surging, leading to expectations of a ‘bumper season’ this Diwali after two years of disruption due to the Covid-19 pandemic.
According to Mukesh Kumar, chairman of the Shopping Centres Association of India, sales have already risen 25-30 percent from pre-pandemic levels.
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“Retailers from several categories are reporting a 25-30 percent surge in sales but 10-12 percent of this should be noted is due to inflation as prices have jumped,” said Kumar, who is also MD of Quest Properties India, which operates a mall in Kolkata. “We are anticipating a higher surge going ahead in Diwali.”
In markets in the east, where Durga Puja is celebrated, and in the south, notably in Kerala, where Onam is an important festival, this trend is already visible, he said. Diwali will be celebrated on October 24 this year.
“Overall, we expect the entire third quarter (October-December) to report a 25-30 percent rise in sales over Q3 of 2019 (pre-pandemic),” said Kumar.
Footfalls and sales have surged in most malls in the country since February, as the pandemic ebbed. While there was a lull after Independence Day, shoppers returned after Shradh, or Pitru Paksha, in September, a 15-day Hindu ritual to honour ancestors, a period considered inauspicious for shopping.
Awaiting Diwali
Comparatively, sales are subdued in malls in the northern and western regions of the country, top executives said. However, sales and footfalls are still higher than in the pre-Covid period.
“Our sales have surged 5-8 percent over the pre-Covid period and we expect this to go higher in the run-up to Diwali. Overall, this quarter is going to be much higher than the others, given the festivals, the wedding season, and then New Year celebrations,” said Yogeshwar Sharma, CEO of Delhi-based shopping mall Select CityWalk.
According to Sharma, currently business is good in categories such as beauty, athleisure, electronics, and cafes and fine dining.
In the West, there was a lull in shopping at K Raheja Corp-owned Inorbit Mall due to the Shradh in September but with Navratri, sales have picked up now.
“Our footfalls have more or less recovered and sales are showing healthy growth. Looking at the trends in the east and south, we expect this season to be good,” said Rajneesh Mahajan, CEO of Inorbit Malls.
Given the increased consumer traction, mall supply in India is set to double, real estate consultant ANAROCK Retail predicted in a recent report. As consumers return to normal shopping and socialising patterns and populate malls again, India’s retail real estate market is responding to significantly improved footfalls, it said in the report.
“Malls are again witnessing high occupancy levels, and the requirement for more organised retail space is pronounced. Going by the high leasing volumes by occupiers across categories and the momentum witnessed in the Tier II & III cities, mall developers are finishing their projects and rapidly adding new inventory,” it added.
ANAROCK projects 15 new malls will enter the market in 12 cities this year.
Pandemic blues
Shopping malls were one of the worst affected in the retail sector across the country as Covid-related movement restrictions impacted their operations for the most of two years.
The two waves of Covid-19 dealt a heavy blow to the sector and resulted in layoffs across regions. The Shopping Centres Association of India reported that revenue dropped by almost half due to local restrictions in mid-March last year, before which it clocked Rs 1,500 crore per month.
Pre-Covid levels of footfalls finally returned in April as the third wave waned and brought back customers to malls.
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