Retailigence

“Club of Knowledge Hunters”

Mall hoppers don’t spell sales

Posted by retailigence on August 30, 2008

Mall developers and retailers in India may be on an expansion spree but signs that everything is not right with the retail industry in Gujarat are beginning to show. Picture this — Around 50 per cent of the branded store outlets have shut down at India’s first designer mall Gallops, located off the Sarkhej-Gandhinagar Highway, while a furlong away, Reliance Mart, the first in India inaugurated by Mr Mukesh Ambani on August 15 last year, attracts mostly tourist crowds.

These shoppers do not spend money at the mall. They are a new breed of tourists who hop from mall to mall ‘just to see’ what it is like or simply to beat the heat in the fully-air-conditioned atrium.

They are different from the youngsters who hang out at malls with friends or frequent the food courts. Most people seen at the Iscon Mall, which houses Reliance Mart as well, are either tourists from other cities or local people visiting the mall for the first time, shop-keepers admit.

“We have just come to see what it is like here. When we came to Ahmedabad, people told us that this was a must-see place, as it is the biggest in Asia,” said Ms Geeta Parikh of Jamnagar, visiting the mall with her son.
The retail scene of Ahmedabad, which used to be concentrated on the business artery of CG Road, has begun to shift to other areas of the city, of which SG Highway is one. Malls such as Big Bazaar, Dev Arc and Vishal Mega Mart are jostling for space on the Highway, leaving the customer spoilt for choice. That is the reason why some of the malls, such as the 3.5 lakh sq.ft Gallops, set up at an investment of Rs 80 crore, wear a deserted look. “As many as 50 per cent of the shops have shut down here. Of the 12 outlets opened two years ago at the food court, only four are operational today,” says painter Mohsin Shaikh, whose art gallery Spandan is located on the second floor of Gallops.

He has an interesting theory about retail in Gujarat. “People in Ahmedabad are new to mall culture and mostly prefer shopping from places they are comfortable with,” he says. For instance, if a customer living in Maninagar wanted to visit Gallops he would have to cross Manek Chowk, Lal Darwaja, C G Road, etc, all of which are major shopping destinations where he would get whatever he wants at a lower price than in a mall on the highway; moreover, he could even bargain at the shops. If this theory holds good, then, it would mean good footfalls, with lower conversion to sales.

He goes on to add, “Mostly, the retail outlets that are shutting down are small brands. The national retail chains situated at the outskirts of the city are thinking of 10 years down the line, when real-estate prices will soar. The city will also expand, bringing the customers closer to them.”

Source: Hindu Business Line

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