50% of malls may shut down by 2010: Experts Opinion

50% of malls may shut down by 2010

Press Trust of India / Mumbai February 24, 2008



Consolidation in the retail industry would result in nearly 50% of the malls shutting down by March 2010 and the hoopla surrounding the sector would considerably subside by then, a brand expert has said.

"By March 2010, around 50% of malls would close down while retailers focusing on consumers would thrive. Those who focus on investors, however, will not survive," Samsika Marketing Consultants Chairman and Managing Director Jagdeep Kapoor told PTI here.

Retailers think that consumer demand had increased but they do not realise that consumers had also become more demanding, he said. "Those who will understand both will survive." Retailers were concentrating more on expansion which was not enough for surviving in a market that was becoming intensely competitive, he said.

"They need to look at depth by improving their services and focusing on how to retain the consumer." By the end of the calendar year, margins of organised retailers were likely to decline, Hypercity CEO Andrew Levermore said.

"Retailers, especially in the food and groceries business, would be the worst affected." "We will see some consolidation and mergers and acquisitions happening in the sector," Levermore said.

However, two categories of retailers would survive in this scenario - the ones with deep pockets who could sustain losses for a long period and the others who had accumulated experience in the sector, he noted.