People getting poorer, shopping malls completely deserted

People getting poorer, shopping malls completely deserted

There are more retailers leaving shopping malls than the retailers setting up their new business there. The weak demand and continued loss have forced them to give up the business.

Nguyen Thi Anh Hong, General Director of Maximart, which is running two shopping malls on Cong Hoa road in Tan Binh district and Ba Thang Hai Road in district 10, said a lot of retailers who leased business premises at the shopping malls, have given back the premises, planning to shift to other kinds of business.

The retailers have been struggling for the last one year to survive the dark days. They hired fewer workers and leased smaller retail premises to cut down expenses. However, the retailers have run out of patience and decided to leave.

Phuong, a regular visitor to the Saigon Square Shopping Mall, has noted that a lot of retailers here have stopped their business. “Some days ago I went to the shopping mall and decided to drop into a kiosk whose owner was an acquaintance of mine for the last five years. However, I could not meet here there. After I called her, I realized that the poor business performance has forced her to stop the business,” Phuong said.

Hong said that Maximart, like other infrastructure developers, has to retain clients by sharing the current difficulties with them. Declining to give details about the leasing fee discounts, Hong only said that it’s necessary to attend to every desire of patrons.

The enterprises, which plan to lease retail premises, have confirmed that they have been welcomed soliciting by real estate developers. Nguyen Thanh Phong, General Director of Cao Toc, a construction and interior decoration business, said that he has received a lot of invitations from shopping malls to lease premises there with attractive preferences.

For example, the developers have offered the method of sharing profit based on the sales, while clients do not have to pay fixed retail premises fees. Besides, they are not required to obtain some certain turnover targets, the thing which was a compulsory requirement in the past.

In the golden age of the retail industry, when the retail premises for lease were limited, while the purchasing power was high, shopping malls’ owners were very picky about retailers. High grade shopping malls would only accept the retailers who distribute well branded goods. Other shopping malls set up the minimum turnover for retailers to ensure their images as luxurious shopping malls.

However, since it’s now more difficult to find retailers to lease premises, shopping malls’ owners have to lower their requirements. Phong also said that shopping malls’ owners now have no other choice than accepting lower profits by offering lower leasing fees to fill in the unoccupied premises.

Besides, according to Hong, shopping malls try to help retailers attract more buyers by organizing sales promotion campaigns, simply because shopping malls need to share difficulties with retailers. The retailers’ business performance success would also bring profits to shopping mall developers.

The representative of a shopping mall in district 1 has revealed that sales promotion campaigns need to be organized regularly to attract customers. It’s simply because people only visit the shopping mall on the days of the campaigns, while it is very quiet on normal days.

“In the past, we only ran promotion programs on special holidays. But now we need to try every measures to catch the attention of customers,” she said.

Dan tri has quoted a report by CBRE, a real estate service provider, as saying that there were more retailers leaving shopping malls than the retailers setting up their new business in Hanoi in the second quarter of the year. Meanwhile, the area of the newly set up retail kiosks tends to be smaller.

Of the total 130 kiosks which shut down or opened recently at shopping malls in the second quarter, 60 percent of kiosks shut down.

The percentage of the kiosks with average area of 20-100 square meters tends to increase, while the percentage kiosks with smaller area of less than 20 square meters has increased.

vietnamnet