The shopping spirit was found to be at the lowest ebb among Delhiites (33%), followed by Ahemdabad (31%), Chennai (30%), Mumbai (28%) and Hyderabad (27%).
Commenting on the trend, D S Rawat, Secretary General Assocham said, "the trend is on expected lines as the economic recovery is rather slow and consumer confidence low."
As per the Assocham estimates, roughly 250-300 malls came up in the country over the last two years but 70-80 per cent of the spaces in these malls lie vacant. The economic slowdown has landed especially heavily on the shopping malls.
The survey further reveals that the slowdown, job cuts and devaluation of the rupee against the dollar is also making imported raw material and finished goods costlier. It will also impact consumer spending in a significant way.
The numbers of malls across the country, unable to justify the rents they charge tenants, are shutting down. The currency fluctuation is a major challenge for the consumer electronics industry because the imported consignment is coming at a higher cost. The dinnerware and cookware companies have already started offering attractive offers and discounts to boost sales, adds the recent survey.
More than 47 percent of the total mall space in nine cities is vacant, the survey found. Delhi-NCR tops the list with 55 percent of malls being vacant, followed by Mumbai at 52 percent, Ahemdabad at 51 percent and Chennai 50 percent. In order to lure retailers, many developers started giving rent-free period for up to six months for big brands.
While some malls are operating at 60 percent occupancy, others are struggling with less than 20 percent. "Vacancy levels are due to poor location, poor design and poor parking facilities while some are operating at 60 percent occupancy," it said.
It said the industry is also facing problems like multiple taxes, lack of clarity in policies and shortage of experts in areas such as supply chain and store management, adds the paper.
The sharpest decline in mall rental values was recorded in Delhi-NCR followed by Mumbai, Ahmedabad, Chennai, Hyderabad, Bangalore, Kolkata and Pune. Most of the shop owners, who participated in the survey, said that increasing rents will not work because at the end of the day it has to be affordable for retailers to do business.
Both retailers and consultants seem convinced that the mall magic seems to have disappeared in a puff of smoke on the back of the economic slowdown, poor revenue model, low footfalls-to-sales conversion and lack of special purpose malls, adds the survey.