Old high streets revive & thrive

Competition to malls are hotting up

MUMBAI: Around the turn of the millennium, Delhi’s Connaught Place, or ‘CP’, for long the place to be in, started losing sheen and footfalls to new-age glass and chrome structures, especially those in Gurgaon.

Shopaholics and window-gazers started migrating to the spiffier environs of air-conditioned malls.

The epitaph of the original “high streets” such as the circular CP in Delhi, was quickly penned.

Fast forward to 2008, and the picture isn’t as bleak.

Thanks to a metro station, footfalls at stores in CP have increased tremendously.
Regeneration efforts by the municipal council, regular shopping promotions by the trader’s association and refurbishment of old cinemas by multiplexes brought in topline brands and restaurants to the high street.

CP’s resilience helped it adapt to a changing retail environment and hence sustain.
Shubhranshu Pani, managing director-retail services of Jones Lang LaSalle Meghraj, a real estate professional services firm, said the joint venture between retailers and New Delhi Municipal Corporation helped revive Connaught Place in National Capital Region.
“High Streets elsewhere are also showing immense resilience and capability to change and adapt as per needs of the consumer.”

JLLM released a report today titled, ‘Leading High Streets of India- Embracing Change’ profiling 21 high streets in seven major cities across India, focusing on their adaptability to organised retail revolution, rentals and superlative visibility for brands.
According to the report, the growth of high streets is important for the growth of organised retail and if due action is taken in terms of paving the roads, improving the lighting and infrastructure, security, providing parking facilities as well as new forms of entertainment then high streets could continue to be a lucrative catchment for retailers despite higher rentals.

“The loyalty of their customers gained over several decades along with the bazaar’s history and charm gives these places an edge in today’s era. With revitalisation, high streets can generate higher footfalls and better realisations” said Pani.

To wit, again: MG Road in Pune has stopped entry of vehicles over the weekend. The entire market becomes a walking plaza with street vendors, animal rides, games and promotional offers brought in to attract consumers.

A couple of malls have also sprung up in the area and the two formats of retail are thriving now.

Similarly, brand penetration has increased multifold on Linking Road, Bandra, Mumbai with multiple formats of retail including departmental stores and exclusive showrooms for apparels, footwear, accessories and premium lifestyle brands coming in over the last five years.

The rentals, of course, have increased from Rs 300 to Rs 550 per square foot per month for large formats and Rs 500 to Rs 950 for small formats within a year from January 2007, according to JLLM.

Yet, more stores are mushrooming on the main street and in the bylanes.

Apart from high rentals, high street locations have issues such as traffic congestion and security hazards which stops retailers from going there.

Ajit Joshi, chief executive officer, Infinity Retail said only if issues such as availability of parking space and street hawkers can be solved will retailers go there.

“In a place crowded with street vendors and hawkers, the consumer wouldn’t enjoy shopping and hence it becomes difficult to get enough footfalls.”

But for many retailers, as long as the footfalls happen and profits flow, any high street would do.

Aniruddha Deshmukh, president-retail, Raymond Ltd, said if renovation and revitalising a high street drives the footfalls and if the revenues coming in justify the real estate costs “then it is definitely a lucrative location for us.”

Others feel that there is a better opportunity in the upcoming high streets than the existing ones.

B S Nagesh, chief executive officer, Shoppers Stop, agrees high streets are evolving. “I believe the potential lies in the new high streets which will get created with upcoming residential areas. But at current rentals, existing high streets don’t seem like a profitable location.”

Another big retailer, who did not wish to be identified, said with common area maintenance charges peaking at malls along with other costs, and lower conversion ratios (compared with footfalls), malls often become more expensive than high street. “So we are working on newer formats specially for high streets,” he said.
 s_tanvi@dnaindia.net