Mall-nourished - Some 30 shopping complexes are set to come up in the city by 2011
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- Published 22.08.08
|Shoppers at South City Mall|
Shop, grab a bite, get an eyeful — and shop again if your pocket’s still too heavy for your comfort.
Calcutta has recently welcomed two swank retail addresses — the gigantic South City Mall and Mani Square on EM Bypass — that offer over 1.5 million square feet of shop-eat-and-entertain space between them.
The most significant addition, however, is in the form of multiplex screens.
While South City has added six screens, including one Gold Class, Mani Square will add three more and an Imax.
Film distributors and producers have long cribbed that the city as a movie market was not expanding. That, perhaps, will change now.
More screens will mean higher first-week collections for new releases, which should help the distribution, exhibition and production business.
South City and Mani Square are among 30-odd malls that have already opened or will take off in and around the city by 2011.
So, is the city — still weighed down by its “thrifty” tag — ready to absorb this avalanche of retail racks?
Here’s what some industry leaders have to say:
“Calcutta is big enough to absorb five to six big malls since these places, over a period of time, also become strong destinations for food and entertainment, not just shopping,” says City Centre’s Pramod Dwivedi, the senior general manager (marketing), retail.
Rahul Saraf, who gave Calcutta its first contemporary mall experience with Forum on Elgin Road, echoes Dwivedi.
“Both Forum and City Centre now often hold crowds beyond their optimum capacity. The new malls will grow and regionalise the market catchments and, at the end of the day, each mall will grow and survive,” he says.
Mani Square CEO Lou Armstrong looks ahead to what he calls “customer loyalty”.
Initially, he says, it’s the “novelty value” that brings in the footfalls. “But, eventually, people will figure out where they would like to go. Besides, the city’s spending power is rising and the mindset changing every day.”
Clearly, the outlook seems buoyant, and most mall developers are confident of creating captive consumer catchments that would grow, feeding also on the housing boom.
“The overall performance of these new malls will be keenly observed by the industry because these malls will indicate the future trends of consumption in Calcutta,” says Abhijit Das, regional director of international property consultants Jones Lang LaSalle Meghraj.
“I feel there is enough steam in the market in the short-term horizon, and hence, logically, in the medium-to-long term as well.”
Others say as the city grows, old shopping places like New Market will not be able to satisfy aspirations anymore.
“So we need new retail addresses,” says Sanjeev Mehra, vice-president (operations), South City Mall.
Madhusudan Binani, franchisee of brands like Benetton, Allen Solly and Adidas, underlines the mathematics behind the success of a mall.
“As a thumb rule, in apparel retail, one must earn a minimum of Rs 40-45 per square foot per day to stay viable, which is not happening at all the big-ticket brand stores right now.
“If this can’t be achieved over a long period, there is bound to be a correction in rentals. The new malls are understandably buoyant now, but once a retailer has more options, the scenario could change drastically.”
There are also those who feel the mall boom is surface gloss. These retailers are anxious about “poor conversions” and soaring rentals.
While retail rentals in the Camac Street-Park Street-Theatre Road-Elgin Road prime zones have nearly doubled to Rs 200-225 a square foot in the past 18 months, some upcoming malls are quoting Rs 275-300 for premium ground-floor shop space.
It’s no secret that some high-profile brands are bleeding, while some stores have perished for lack of walk-ins.
Against this backdrop, some retailers fear, the surfeit of shop-floor space being readied could well lead to a supply overhang, more so if the projected IT boom doesn’t happen.
Vijay Dugar, franchisee of Reebok and Levi’s, however, remains positive.
“I need to do sales of at least Rs 60,000 per day at my Reebok Performance store in South City to be in business, which is attainable even with a 20 per cent conversion. However, if most of the big brands take huge hits over a considerable stretch, I feel the brands will come together and say ‘it’s not happening’, and rentals will come down.”