Small shop, big challenge

The coming of the malls led to the first shakeup in Indian retail; many standalone stores shut down or saw their business shrink. Will foreign investment in retail aggravate the situation? Priyanka Sharma and Veenu Sandhu visit two retail hotspots in Delhi to see how old-style markets are faring.

On a Tuesday afternoon, the parking lot next to PVR Anupam Cinema in Saket, Delhi, is almost empty. Parking attendant Kareem Morani sits idly, stifling a yawn. “On weekdays, only school students who skip school and watch the morning show come here,” he says. The vehicles belong mostly to those who work in offices in the commercial complex around the cinema hall. A few street urchins roam the market freely, periodically harassing a young couple seated on a bench. When asked why they have chosen this market when there are airconditioned malls nearby, the young man replies that “this market offers more privacy, since there are fewer people here”.

 

At the cinema’s ticketing counter, teenagers — some conspicuously still in their school uniforms — are buying tickets for the morning show of the latest Twilight teen vampire movie. One of them says, “The only reason I’ve come to this market is because of the cheaper tickets.” At PVR, tickets to shows before 1 pm are Rs 50 cheaper. The offer was not planned for this location, but it has certainly helped attract more people to the market.

Almost embarrassed at being spotted here, Ritika Mehra and Komal Pandey, second-year students of Jesus and Mary College, confess sheepishly that “The only reason we’re here is because of the proximity of this PVR to our college.”

There is another PVR in the mall cluster of Saket, less than 2 km away, that consists of Select Citywalk, MGF Metropolitan, Square One and Courtyard malls, but tickets at this one are unavailable even on a weekday. “Besides, we always end up spending more money there because of more options to eat and shop,” says Mehra. At the Anupam complex, choices are scarce.

The price may be lower, but the crowd watching the movie at Anupam, says Pandey, can be a problem. “At times, you find creepy men whistling during a romantic scene in a movie.”

Shanky Kalsi, store manager at Om Book Shop — which also has an outlet at MGF Metropolitan Mall — says footfalls have reduced by nearly 80 per cent in the last two years. He cites three primary reasons: the lack of proper parking space, the number of street dogs and beggars that frequent the market, and periodic construction in the area. “As a result, we hardly see any foreigner visiting the market. They naturally prefer the malls.” This was not the case a few years ago when the market, which was home to the Capital’s first multiplex, witnessed a very “upmarket crowd”, he says. Now the crowd is mostly “local”.

In 2010, the chain coffee shops and eateries, including Barista, Bennigans, Subway and Azzuro, shut down. Recently, Nirulas and PlanetM shut shop. When asked why, Bhagwan Das, vice-president of the market association that looks after the complex, gives a non-committal answer: “They didn’t want to renew their contract.” The last two names had been in the market for nine years.

Das appears unperturbed, enjoying a shawarma from Lebanese Point, a popular food joint in the complex. Though footfalls reduced after the malls came up in 2007, he claims they are now robust, because of the association’s intervention in creating better parking space and “cleaner lanes”. “People come to my office, begging for space in the market,” he says.

He adds that rentals have gone up, not down: “Because it’s very expensive to buy space inside malls, people prefer to buy office space here.” While a first-floor space is leased out at Rs 120 per sq ft, the same on the ground floor can go up to Rs 600 per sq ft, he says. These figures were lower five years ago, he adds. Select Citywalk, by comparison, charges Rs 300-600 per sq ft for space on the ground floor.

Store owners in the market, however, tell a different story. The only reason they haven’t taken space in the malls, they say, is because of the revenue-sharing model, wherein the mall takes a percentage of the revenue earned — anywhere from 3 to 25 per cent, depending on the category of retail.

“The competition is also higher in malls,” says Manu Joshi, manager of Sunny Communications, a mobile accessories store, who has been in the Anupam market for over 20 years. “A small shop like mine would make no profit.” But given a chance, he might consider shifting, he says.

The weekday daily footfalls have fallen to almost 1,000 from the 5,000 recorded two years ago.

“During weekends,” says Joshi, “you see some couples enjoying the winter sun, but even that has reduced to 2,000.” These couples don’t spend money, just “laze around”, he says. Most of them come to watch a movie.

With only one supermarket in the area, called 24/7, and no international apparel brands such as Zara, Aldo or Marks & Spencer to choose from, the market is “of no use” to shoppers, says Mitali Sharma, 27, who was a regular at the market five years ago. “This was a cool place to hang out, to shop and eat... Now there are just some cheap food joints, one or two coffee shops and only Benetton to shop from!”

While restaurants like Ruby Bar & Grill (previously Ruby Tuesday) do better business in the malls, smaller food joints and kiosks in the complex, such as Al Bake and Lebanese Point, are very popular among students. “Unlike food courts in malls that confuse shoppers, we have a simple, affordable menu. People travel all the way from North Campus to eat our shawarmas,” says the manager.

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Lt Col Chandra Prakash (retd) was among the first to open a shop in Noida’s Sector 18 market way back in 1995. He started out as a franchisee for Nanz, India’s first major supermarket chain, and his Millennium Shoppe sold groceries and crockery from the basement and the first floor. About seven years ago, when Centrestage Mall opened right next to this commercial hub of Noida, the market witnessed a minor shakeup. Shoppers started moving towards the mall which had, besides retail outlets, a food court, a multiplex and a convenient underground parking lot. But Prakash was unfazed.

His grocery store was doing well and he wasn’t going to change anything.

Then about five years ago came a bigger challenge: The Great India Place, one of India’s largest operational malls, spread over 1.5 million sq ft, came up right opposite the market, in Sector 38. TGIP, as it is called, had a host of retail outlets such as Shoppers Stop, Big Bazaar, Globus, Nike, Adidas, Pantaloon, Marks & Spencer, besides several smaller home and grocery stores, food and entertainment zones, cinemas and more. Even so, Prakash resisted. Then about three years ago, he shut down the grocery store on the first floor and opened a Levi’s outlet. “I did it because I needed time for myself,” he says, adding, “But when a big competitor comes in, some change is bound to take place.”

Noida’s Sector 18 market is now bracing for the biggest onslaught yet. DLF, the real estate giant, is building the sprawling Mall of India nearby. Spread over 1.4 million sq ft, it will have a retail zone with 430 retail outlets and more than 140 restaurant and food joints. “DLF’s mall is still about two years away from becoming operational,” says the manager of an apparel outlet who does not wish to be named. “Our immediate worry is the 15-storey Wave 1st Silver Tower which is ready, though it is yet to be occupied,” he adds. The commercial square will have retail outlets on four floors with the ground floor reserved for high-street brands. “If that wasn’t bad enough, there is Wave Tower I coming up practically in the market,” this manager adds.

“Overall, the market has lost about 50 per cent of its customers to the malls,” says Karan Singh Negi, assistant store manager, Levi’s. (Some shopkeepers put the figure at 25 per cent.) The Sector 18 market currently has about 140 shops. “After TGIP came up, Centrestage, which is a sub mall, also lost out on customers.” Weekdays are not so bad, says an official at a Dell store, “but on weekends, which are family days, most people prefer going to the mall.” Electronic shops like his are now trying to woo customers with offers and add-ons. “We might give headphones free with a laptop or some accessory with a mobile phone. Earlier we didn’t need to do these things,” he says, adding that in a market like this, people can haggle a bit over the price of an electronic good, “unlike in a mall”. But there are other challenges. “You have come to a Dell store. Now, if you want to check out a Sony outlet, you will have to walk around in the market looking for it. In a mall, the stores are all so conveniently located.”

The area where Wave Tower I is coming up used to be a parking lot. With that gone, parking in the market has become chaotic. “While we are grappling with this issue, malls have both basement and open parking,” says Prakash, who is also the vice-president of the Noida Sector 18 Market Association. It’s things such as these which affect business more than just the competition, he adds. The association is now working hard to spruce up the market — improving the parking space, roads and streetlights. “We have frequently approached the administration for help, but the Noida Authority CEO has changed six times in the last four months, so we are helpless,” Prakash adds.

The lone Subway outlet in the market, meanwhile, bears a deserted look, as do shops of shoe brands like Bata and Liberty. The staff at the Subway counter say another Subway outlet has opened in the mall across the road and business has been divided. In the last few years, some shop-keepers have shut down and instead let out their space. “They got better returns from rentals than from their shops,” says Prakash. But if shops have shut, there are others which have opened. Such as the Nike outlet which replaced the Mufti store on November 7. “We keep a different variety of shoes from those that are available in the mall,” says the salesperson at the Nike store.

For shops such as Lakshita, which stock women’s apparel, things have stabilised after the initial shakeup. “My clientele is very specific; so they still continue to come to the shop, though even we were affected in the initial months when the malls opened. There are others who are still struggling to deal with the competition,” says Deepak Manik, the shop’s owner.