Retailers eye small towns as under-performing stores, e-comm competition weigh on biz: JLL

With rising rentals in shopping malls, stiff price competition from e-commerce have made life difficult for retailers who are now looking to expand in smaller towns and adopt omni-channel strategy to run healthy businesses, according to property consultant JLL.

"Retailers are struggling at various fronts apart from rising rentals. :Under-performing, less efficient stores with huge inventory pile-up of merchandise, stiff price competition from dominant e-commerce players and poor inventory management are some of the challenges retailers are facing," said Shubhranshu Pani, MD - Retail Services, JLL India.

To deal with these challenges, he said, retailers are shifting to tier II and III markets, where the brand presence is minimal.

In these markets, real estate costs are 30-40 per cent lower than those in metros and tier 1 markets.

Besides this, Pani said "retailers are optimising store sizes, creating multiple touch-points for consumers along with having an omni-channel presence within the sphere."