Wednesday, September 10, 2008

Slowdown turns Ahmedabad into 'retail graveyard'

Once a darling of retailers and a hot new destination of modern retail, Ahmedabad is turning into a “retail graveyard”. Apart from glaring vacant spaces in the swanky city malls, the first visible downturn seems to be the closure of two Big Bazaar outlets.

Be it a heterogeneous product mix, inviting ambiance or other cosmetic benefits of modern retail like air conditioning, all have failed to sustain the interest of Gujarati consumers looking for functional benefits from the retail experience. The result: closure of ambitious retail projects across the city. Brands like Nike, Tea Centre, Conizza, etc, have already closed

“Not just prohibitive rentals, but consumption pattern of local consumers too has been a roadblock to modern retail in Ahmedabad. Although the cash-rich Gujarati consumer has lured brands to Ahmedabad, low acceptability of modern retailing will turn the city into a retail graveyard,” points out sector analyst Harish Bijoor of Harish Bijoor Consults Inc.

The closure of two Big Bazaar outlets, the ambitious hypermarket format of the Pantaloon Retail (India) Ltd, in a span of six months, the last being in the process of winding up, could just be the tip of the iceberg.

While the company had closed down its Big Bazaar outlet in Bapunagar (old city) earlier, its outlet at Shyamal Crossroads is all set to down shutters. However, western zonal chief of the Pantaloon (Retail) India Ltd, the promoters of Big Bazaar, Anand Adukia told ET that the closure has more to do with consolidation rather than shutting shops in totality.

“While we have closed two stores in Ahmedabad, we are strengthening the capacity of the remaining three stores. The 22,000-sqft Big Bazaar outlet in Bapunagar has been shut down with the idea of expanding Big Bazaar at 10 Acres Mall in Maninagar, whose size will be increased to 1-lakh sqft to accommodate the entire customer base in the area,” he insisted.

Retail analyst and marketing faculty at IIMA Piyush Sinha says retail consolidation is a natural phenomenon. However, this is not the first instance that retail boom has been a dud in the city.

Ahmedabad could see withdrawal of more brands in future, retail analysts predict. The Sarkhej Gandhinagar Highway that once prided itself in housing a congregation of malls has now the likes of Gallops, Dev Arc, Fun Republic, all nursing their failed relationships with various brands.

Source: The Economic Times

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