It is a Sunday afternoon and there is a long queue for security check in front of Forum Kormangala Mall in Bengaluru. There is a slight chill in the air with the onset of December but tempers are running high as consumers get impatient, awaiting their turn to be screened by the security personnel. Some even get into heated arguments with guards. The confusion is the result of a new norm by the Karnataka government to allow only ‘fully vaccinated’ consumers in malls. The restriction, however, has not deterred the shoppers, who are thronging in huge numbers to shop freely after months of lockdown. The scene is in contrast to a situation months ago when shopping malls were bereft of visitors.
The malls in Delhi NCR, too, are struggling to keep the crowd in check and shoppers are finding it difficult to find parking space, especially, when trying to enter after 12 PM on weekends.
“It is my sister’s wedding next week and we have a long list of shopping to do but we had to wait for an hour for the parking space and then even in shops, we have to wait for people to leave before we enter to comply with norms so that the space is not overcrowded,” says Vivek Dalmia, a finance professional, in Noida.
After struggling with sluggish sales and low footfalls for several quarters because of the COVID-19 pandemic, retailers in shopping malls finally seem to be on the verge of a recovery.
In November, backed by Diwali sales and buoyant consumer sentiment as the pandemic waned, shopping malls in most parts of the country registered over a 70 percent growth in footfalls.
According to Mukesh Kumar, chairman of the board at the Shopping Centres Association of India (SCAI) and chief executive officer of Infiniti Malls, malls had reported a 70-75 percent increase in footfalls in October and November compared to the corresponding period in 2019 (pre-COVID).
“Shopping malls across the country have clocked 70-75 percent recovery in footfalls in October-November, while some premium malls have even registered 100 percent recovery as compared to the pre-COVID period,” Kumar told Moneycontrol.
Inorbit Malls, which operates shopping centres in Baroda, Hyderabad and Mumbai reported a similar trend.
“In the Tier II city of Baroda, footfall recovery was about 80-85 percent in October-November as compared to corresponding period pre-COVID, while Hyderabad, too, surprised us with 70 percent recovery in footfalls despite several corporate entities and IT companies yet to resume work from the office,” said Rajneesh Mahajan, CEO of Inorbit Malls.
Sales grew by 85-90 percent in October-November for stores that operate in malls, said Kumar.
“Basket sizes have become larger while, due to higher logistics and production costs there has been price growth, too, contributing to sales growth,” he added.
A recent note by ICICI Securities Ltd said The Phoenix Mills clocked mall consumption of Rs 660 crore in November, which is 116 percent of November 2019 levels and Rs 670 crore in October 2021, which was 91 percent of October 2019 levels.
Revival across categories
Unlike last year, when sales had picked up after the first wave of the pandemic subsided, the recovery this time around is across categories, said shopping mall operators.
“Though certain categories are higher than others, most categories have fared well. The encouraging part is that apparel has seen a revival, which is a very positive sign,” said Mahajan.
According to SCAI, too, the recovery is across segments such as footwear, formal wear and casual wear and jewellery. Growth has been also aided by weddings and travel.
A recent note by rating agency ICRA on retail malls, too, talked about the trend and said store categories such as hypermarkets, electronics and fashion and beauty stores have done extremely well with certain brands even exceeding the pre-COVID era sales.
Recovery in the fashion and accessories category has been aided by pent-up demand, it added, which is reflected in the performance trends of large fashion retail chains.
“Store segments such as department stores and food and beverage (outlets) are observed to have a moderate recovery in line with the improvement in footfalls. As the footfall numbers continue to increase, aided by the festive season and recovery in multiplex operations in Q3FY2022, these categories are also expected to show further improvement,” ICRA said.
Region-wise, most states fared well, but Maharashtra lagged behind due to the delayed reopening of malls as well as norms around admitting only full-vaccinated consumers on mall premises. Malls in Mumbai and Maharashtra, as a result, reported an increase in footfalls in the range of 60-65 percent, according to SCAI.
“Delhi has seen strong recovery as they had opened malls much before other regions in June while wedding and travel, too, have helped the malls in regions,”said Kumar.
A better year overall
Shopping malls are expecting a lull in sales after New Year’s Day as the festive season ends. Because of the festive cheer, the financial year 2022 is going to be better than the last financial year.
ICRA expects retail malls to recover 75 percent of their pre-COVID rentals in the current financial year, supported by pent-up demand and resumption of multiplexes.
SCAI, in fact, is hoping that malls will not only recover but even grow in comparison to the pre-COVID period as well. “We are hoping to grow by 15-20 percent over FY20,” said Kumar.
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