Indicating a bleak Diwali this year, malls across the country have reported a sharp decline -- as high as 35-40 percent -- in footfalls by festive shoppers, a new survey has revealed.
Attributed to the economic slowdown, high interest rate and inflation, and job uncertainties, the steep drop in shoppers have hit the malls which are already suffering from large vacant spaces, said the survey conducted by Assocham.
The Assocham team interacted with around 650 leasing managers and mall managements, strategists, marketers and supervisors in Mumbai, Delhi-NCR, Chennai, Kolkata, Ahmedabad, Hyderabad, Bangalore, Chandigarh and Dehradun.
The festive shopping spirt was found to be the lowest in Delhi (33 percent), Ahmedabad (31), Chennai (30), Mumbai (28) and Hyderabad (27), said Assocham secretary general D.S. Rawat, terming the trend as on "expected lines as the economic recovery is rather slow and consumer confidence low".
Assocham estimated that roughly 250-300 malls came up in the country in the past couple of years but 70-80 percent of their spaces lie vacant, with the economic slowdown hitting them heavily. Several malls, unable to justify the rents they charge from tenants, are shutting down.
In the nine major cities, more than 47 percent of the total mall space remains vacant, with Delhi-NCR toping the list with 55 percent, followed by Mumbai at 52 percent, Ahmedabad at 51 percent and Chennai at 50 percent.
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Several developers have started giving rent-free period of up to six months for big brands to lure retailers.
While some malls are operating at 60 percent occupancy, others struggle with less than 20 percent, mainly due to poor location, poor design and poor parking facilities, the survey found.
The industry is also facing problems like multiple taxes, lack of clarity in policies and shortage of experts in areas like supply chain and store management.