Approaching festivals fail to end pandemic blues for Maharashtra shopping malls
At a time when retailers across the country are enthused with the approach of the festive season, shopping malls in Maharashtra are not anticipating much out of the event given the government curbs in the state. Most malls in the region are reporting footfalls in the range of 15-20 percent as compared to the pre-COVID times, and expect the festive season, too, will not bring a big turnaround if the restrictions on the entry of malls are not eased by the government.
“The government has mandated that all the customers entering the mall should be fully vaccinated. However, given the pace of vaccination, which stands at 32 percent in Maharashtra, we are not able to admit many people in our malls,” said Mukesh Kumar, Chairman, Shopping Centres Association of India and CEO, Infiniti Malls.
According to Kumar, consumers in the age group of 18-45 frequent the malls most but most people who have been administered two doses of vaccine are above 45, resulting in thin crowds.
Given the current scenario, shopping malls have low expectations from the approaching festive season. “Unless the restrictions ease, we do not expect to see a significant uplift,” informed Rajneesh Mahajan, CEO, Inorbit Malls, which operates three shopping malls in Mumbai. The company is witnessing 15 percent footfalls in comparison to the pre-COVID period.
If the situation does not improve, Inorbit Malls will cancel its usual festive plans in Mumbai, which involves the decoration of malls and other marketing activities. The company spends about Rs 1.5 crore in preparation for the festive season from October to December.
Much like the retail industry, shopping malls also draw about 30-40 percent of their sales during the festive season, which starts with Dussehra and lasts up to Christmas in the country.
Thane-based Viviana Mall is also experiencing less than 20 percent of footfalls as compared to the pre-Covid times. “We had not seen footfalls this low even when we had opened eight years ago,” said Rima, Kirtikar, CMO, Viviana Mall.
Malls are hopeful that the crowds would start flocking to the malls as more people get vaccinated towards the end of September after completing the mandatory 84-day gap between two doses.
SCAI Chairman Kumar also indicated that the government is considering easing restrictions to allow people with a single dose of vaccination if the COVID-19 cases do not register a spike after Ganesh Chaturthi.
“We are expecting a recovery to the tune of 80-90 percent during the festive sales with the easing of restriction and picking up of vaccination pace,” added Kumar.
Retail bounces back
Apart from Maharashtra, retailers and shopping malls in other parts of the country have reported a strong recovery with the reopening. A recent survey by the Retailers Association of India showed that sales recovered to as much as 88 percent of the pre-pandemic levels in the country aided by festive shopping. The findings of the survey showed that retail businesses in North and South India are almost back to the pre-pandemic levels in August 2021 with sales at 98 percent and 97 percent (of the pre-Covid times), respectively. The retailers in South India reported 81 percent recovery but West lagged with only 76 percent recovery when compared to the pre-pandemic levels (August 2019).
Last month, shopping malls in Maharashtra were allowed to reopen their premises after being closed down since the onset of the second wave in April. The government, however, mandated that the shopping malls should have all of their retailers, salespersons, and housekeeping staff fully vaccinated before opening the mall. Additionally, it also asked the malls to permit consumers who have been administered both doses of the vaccine.
The prolonged closure coupled with a restrictive opening has hurt the business operating in the segment. SCAI Chairman Kumar, in an earlier conversation with Moneycontrol, had shared that retailers in the region have incurred losses to the tune of Rs 4,000 crore every month and in the past 18 months, they have lost Rs 35,000-40,000 crore of revenue.
According to RAI estimates, there are about 50 malls in Maharashtra, employing more than 2 lakh people, generating Rs 40,000 crore in business and contributing Rs 4,000 crore in GST per month.