How many shopping malls are enough for a city?

You may have noticed a small blue bar that we added to the IREFD website lately. We have been getting a few questions on and off these days from readers. A couple of days back, a question asked by reader Mr. Jagdishwaran G had us stumped. All he asked was, "How many shopping malls are enough for a city?"

Mr. Jagdishwaran, here is your answer. Seven. 7 malls are enough for a city. Did we just hear you say think WTF? Are these guys at IREFD really this stupid? Umm okay, we will revise that figure a bit then. Thirty Six. On second thoughts we think 36 malls are the right number of malls for a city to say enough! Not convinced, sir? You can then, choose any figure between 69 and 496. There has got to be a number in that range which is exactly the 'enough' number of malls that can be built in a city. Are you looking for an axe to put through the computer screen right now? Give us a chance to calm you down.

Small Shopping Malls, Gigantic Retail Centers and everything in between

We will keep these definitions small, easy to relate with, the next time you see a center and above all, very relevant to the present day and the future scenario.

Gigantic Retail Centers: Anything above 7 lac Sq ft GLA (Gross Leasable Area) would qualify for a Gigantic Retail Center according to us. And for a shopping mall that big, you don't really need a brand strategy or zoning plan. Just send an invite to every retailer on our soil and pray and hope that they come to set up shop with you. Gigantic Retail Center owners, you will inevitably build a Middle Path Center next.

The Middle Path Retail Centers: Shopping malls between 4 lac Sq ft to 7 lac Sq ft qualify for this category. If you own one such place, you are a very lonely person. You started out with a vision that got mangled up somewhere. As a result, you drive an Audi but you have no friends left to enjoy the ride with. You know you should have built a Gigantic Retail Center. You just didn't feel it hard enough. But don't worry, you WILL start up that Gigantic Retail Center Project next and that will be the last shopping mall you will ever half build.

Small Shopping Malls/ Retail Centers: Shopping malls between 50 thousand to 3 lac Sq ft fit snug into this category. If you own one such center, your only dream is to build a Middle Path or a Gigantic Retail Center one day. You will succeed and flourish, albeit on Mars. But so what? A center is a center after all.

How is India's Shopper Behaviour changing?

# Catchment areas for each retail center is gradually and surely decreasing. As more centers come up in every city, they eat away into each other's shares of the catchment.

# The young Indians with the spending power are so overworked, stressed and lazy that driving distances for shopping is drastically reducing. In a research we conducted in Kolkata, Agra, Guwahati and Patna recently, we found out that the desired driving distance for a shopper is about 8 km on an average today. This, we reckon will further reduce to about 5 km on an average in the next few years. Choose your catchment circle wisely while doing your feasibility study dear analysts. (Note: Smaller the city, smaller the desired driving distance to shop)

# The teens are doing a lot of shopping online these days. Please refer to our in depth article Store Vs. Website and you will know what we are saying. Even retailers seem to be understanding this. Sadly, center owners are driving around with their windows rolled up a lot these days and missing out on what the masses are saying.

# The teens also get embarrassed when they have their parents around. So a lot of shopping in the stores meant for teens is getting rogered when the youngsters come to the retail centers along with their folks. Bah, you will say. True, we will remind you again. If in doubt, try commenting on a Facebook picture of your kid and her friends having fun. You could become the talk of her school the next morning. Not a great thing to happen. Did we hear you plan the next Teen Mall? Or a Forties Mall? It could actually work!

Update to original post: Image below inserted later to show you what mainstream for teens today is;

It is uncanny to stumble upon such a tweet the next day of this post going online! 

# The spending bracket you are looking at and drooling also has to battle increasing fuel prices, travelling expenses, food expenses and so many other expenses which are more important than a visit to the shopping mall for some retail therapy. We also have that growing doubt that as days go by, this situation is not going to improve much for Indian retail.

There could be so many trends emerging each day and each one of them could be altering retail history a bit as we try to answer Jagdishwaran's question.

How many shopping malls are enough for a city?

# Gigantic Retail Centers: If you are talking about these large shopping malls, please think about the zoo or the museum in your city. Try and remember when you went there last. Back at our office, none of us could. 1 Gigantic Shopping Mall is more than enough for a city. It is a silly mistake we can live with. After all, even if you don't go there, there are days when the zoo is packed to the brim. And we all know how such footfall numbers can be advertised to add to the already existing footfall chaos in India. If you are thinking of building one today, we would recommend building a small airport instead. It would cost the same to build and operate and would be much more financially rewarding in the long run.

# Middle Path Retail Centers: This is where the action currently is. We could do with as many as the size of the city allows. If we drew 5 km radius circles inside the city map that do not overlap, one such Center for each circle is sustainable for some time to come. Also, while taking the compass to the ttk map you just picked up, leave out the suburbs. Trust us on this one.

# Small Retail Centers: This is the future of Indian retail. Think Inorbit, Virtuous Retail etc. In twenty years from now, everything that is not a small retail center will find it very hard to survive. You know how the dinosaurs thought that their size and might would keep them alive forever? It is a pity that all of them are currently being filled into your car's petrol tank via pipes. That is dependable information.

As shoppers find lesser time to canoodle around behemoth retail centers to buy a box of elusive little board pins, and their disposable incomes get eroded by various factors, shopping will happen at walking distances. These small centers, unknown to mall builders, already exist. They keep India coming back to them each day. For bread, booze, lingerie and under arm deodorant. And these small centers will thrive and grow in numbers till a meteorite or something intervenes with their YOY growth. If you are planning to own successful retail centers, think local, small and sustainable. Encourage social shopping formats, organic produce vendors and value retail chains to come and set shop at your center. You will be a winner.

Hope that helps you Mr. Jagdishwaran. If you are reading this and your name does not match with that one, you could use the little blue box above and ask us a real estate question. We may not have answers to all of them but it will make us think. And five people thinking are always better than one.

Cheers!