INTRODUCTION
Shopping malls
The latest trend in the corporate universe is of the emergence of the shopping malls. Shopping malls are an emerging trend in the global arena. The first thing that comes in our mind about the shopping malls is that it is a big enclosed building housing a variety of shops or products. According to historical evidences shopping malls came into existence in the middle ages, though it was not called so. The concept of departmental stores came up in the 19th century with the Industrial Revolution. Consumers wanted a better shopping experience and this demand gave rise to the emergence of shopping malls in India .
Originally the first of the shopping malls was opened in Paris. Then the trend followed in the other metros over the world, and there was a spree of shopping malls coming up at various places. In this age of mass production and mass consumption, the concepts of shopping malls is most modern method of attracting consumers. The concept of shopping was altered completely with the emergence of these shopping malls.
Shopping was no longer limited to a mere buying activity - it has become synonymous with splurging time and money. People simply go about roaming through the shopping mall in order to peep through the window of the shop and often ending up buying something they like. The consumers desire a combination of comfort and suitability which the shopping malls cater to, and so this format of shopping has become so popular all over the world, and especially so in India. The inclusion of amenities like restaurants, multiplexes, and car parks attract more and more crowds to shopping malls, that are considered family hangout zones. 1 Advantages of shopping malls:
o Increase in the growth of the organized retail sector o Monumental increment in economic growth o Employment generation by the organized retail sector o Good competition means better products & services
Disadvantages of shopping malls:
o The companies with superior resources would muscle out the ones inferior to them. o Monopolization of the organized retail sector
In India, the emergence of shopping malls has mostly altered the lifestyle of the consumers. With the growth in income, changing attitudes, and also the demographic patterns favor the emergence of shopping malls.
The trends to follow in the future:
The shopping malls favor a growth in the Indian organized retail sector by 10% within 2010 There would be different formats of shopping malls depending on the region.
2 BRIEF HISTORY
In the United States, people began moving to the suburbs during the 20th century. Shopping malls were built to serve consumers living in areas outside of the cities. By 1916, a shopping mall called The Market Square opened for business in Chicago, IL. The facility was comprised of 28 stores, apartments, and offices. The Market Square was located in the expensive Lake Forest suburb and is thought to be one of the first planned shopping centers in the U.S.
In 1950, the Northgate Shopping Center was built in Seattle, Washington. This shopping mall boasted two rows of stores on each side of an open-air section where shoppers could walk. Two department stores anchored each end of the shopping center. The first enclosed shopping mall was Southdale Center in Edina, Minnesota which opened its doors in 1956.
Up until the mid 1990s, most modern-day developers built enclosed shopping malls in order to create a climate-controlled shopping environment. Today, developers are returning to the creation of open-air shopping malls. Outlet malls, shopping centers featuring name brand retailers selling their products at discounted prices, are often built in an open-air format.
3 Types of Shopping Malls
In general, you will find only regional centers, superregional centers, and fashion/specialty centers on this Web site. Relatively few community centers were chosen, but appear here because the center may have, at one time, been considered a regional center. Only a few theme/festival centers were listed in heavily urbanized areas, such as San Francisco, because of their particular attractiveness or size. Finally, the new designation, lifestyle center, displays because of their classic-mall type appearance even though they are without a classic-mall anchor store.
Fashion/Specialty Centers
Characterized as higher end, fashion oriented centers between 80,000 and 250,000 sq. ft.
Community Centers Characterized as having between 100,000 and 350,000 sq. ft. Usually two types of anchors, such as a discount department store or large specialty/discount apparel store.
Lifestyle Centers
A new designation that has a loose definition. Generally, it's a center that does not have an anchor tenant in the classic sense (that is, a department store). However, lifestyle centers increasingly have a cinema as a major tenant. Others have just a small collection of exclusive shops.
4 Outlet Centers Characterized as manufacturers' outlet centers between 50,000 and 400,000 sq. ft.
Regional Centers Characterized as having between 400,000 and 800,000 sq. ft. Usually two or more anchors, such as a conventional department store, junior department store, mass merchant, discount department store, or fashion apparel store.
Superregional Centers Characterized as having over 800,000 sq. ft. Usually three or more anchors, such as a conventional department store, junior department store, mass merchant, or fashion apparel store.
Theme/Festival Centers
Characterized as tourist-oriented, retail and service centers between 80,000 and 250,000 sq. ft.
5 COMPONENTS OF SHOPPING MALL
Food court A shopping mall food court consists of food vendors offering a selection of food. At a typical food court, food is ordered at one of the vendors and then consumed at a seating area, which is normally a plaza surrounded by the counters of the multiple food vendors.
Department stores
A department store is a retail establishment which specializes in selling a wide range of products without a single predominant merchandise line. Department stores usually sell products including apparel, furniture, appliances, electronics, and additionally select other lines of products such as paint, hardware, toiletries, cosmetics, photographic equipment, jewelry, toys, and sporting goods. Certain department stores are further classified as discount department stores. Discount department stores commonly have central customer checkout areas, generally in the front area of the store. Department stores are usually part of a retail chain of many stores situated around a country or several countries.
6 OBJECTIVE
THE PURPOSE OF DOING THE PROJECT IS TO FIND OUT
1. WHAT ARE THE FACTORS THAT IS MAKING SHOPPING MALL HUGELY SUCCESSFUL ?
“The success of modern shopping centers relies on a number of critical success factors. These factors include attainability, effortless business, service variety, ambience, price, active marketing and cleanliness,” says Arto Lindblom, Professor of Retail and Channel Management at the Helsinki School of Economics. The atmosphere of shopping center created by sound registration, color scores and illumination, alongside with the professional concept create additional comfort for visitors which influences loyalty of buyers and their desire to pass more time in the shopping center.
Honestly speaking, the competition is amplifying, and factors on which we did not reflect earlier (color, light, a sound and even smells) now act as an advantage in fighting for the buyer.
7 2. FFECT OF SHOPPING MALLS ON THE SMALL RETAILERS ?
Retail trade contributes around 10-11% of India’s GDP and currently employs over 4 crore people. Within this, unorganized retailing accounts for 97% of the total retail trade. Traditional forms of low-cost retail trade, from the owner operated local shops and general stores to the handcart and pavement vendors together form the bulk of this sector. In the absence of any significant growth in organized sector employment in India in the manufacturing or services sector, millions are forced to seek their livelihood in the informal sector. Retail trade, which has been a relatively easy business to enter with low capital and infrastructure needs, has acted as a refuge source of income for the unemployed.
8 Organized retailing has witnessed considerable growth in India in the last few years and is currently growing at a very fast pace. A recent KPMG survey report prepared for the FICCI states that organized retail, estimated as a $ 6.4 billion industry in 2006, is projected to reach $ 23 billion by 2010. The share of organized retail in overall retail sales is projected to jump from around 3% currently to around 9-10% in the next three years. A number of large domestic business groups have entered the retail trade sector and are expanding their operations aggressively. Several formats of organized retailing like hypermarkets, supermarkets and discount stores are being set up by big business groups besides the ongoing proliferation of shopping malls in the metros and other large cities. This has serious implications for the livelihood of millions of small and unorganized retailers across the country. Need to Regulate Organized Retail
Large format retailing is controlled and regulated across the world. The experiences of Western European as well as South East Asian countries are particularly relevant in this regard. However, an appropriate regulatory framework for the organized retail sector in India has to be framed keeping in mind the Indian specificities. India has the highest shop density in the world with 11 shops per 1000 persons, much higher than the European or Asian countries. The potential social costs of the growth and consolidation of organized retail, in terms of displacement of unorganized retailers and loss of livelihoods is enormous. Regulation in India therefore needs to be more stringent and restrictive. There are broadly three ways in which the adverse impact of the rapid and unbridled expansion of organized retail can be felt:
9 1. Around 95% of the 12 million shops in India have a floor area of less than 500 square feet. The impact of the growing market share for organized retailers is being manifested in the falling sales for the unorganized retailers in several places. The NSSO surveys already indicate a significant decline of more than 12.5 lakhs in the number of self- employed retailers in urban India (by current weekly status) between 1999-2000 and 2004-05. Further acceleration in the growth of organized retail would eventually result in making business unviable for a large number of unorganized retailers, particularly in the event of a slowdown in consumption growth and retail sales. In the backdrop of huge unemployment and underemployment persisting in India, small-scale retailing still provides livelihood security to around 20 million urban workers and 12 million rural workers. Their displacement would further worsen the unemployment scenario.
2. Giant organized retailers use their monopoly buying power to squeeze small producers of agricultural as well as manufactured products. The experience of the farmers of developing countries with the giant food retailers has been particularly bad. The farmers become dependent upon the inputs, credit and technology supplied by the food retailers and end up being at their mercy in terms of prices for their produce and quality standards. Contract farming, which is the preferred mode of operations as far as the agribusiness corporations and food retailers are concerned, has led to agrarian distress in many places. Moreover, uncontrolled diversification in agriculture away from foodgrains can imperil food security. In the backdrop of the crisis being already faced in Indian agriculture, the entry of large retailers with monopsonistic control can aggravate the situation.
10 3. The proliferation of large format retail outlets reshapes the urban landscape in myriad ways. Land use patterns change drastically, often in violation of city plans. Given the unplanned and chaotic path of urban development witnessed in India over the past decade and a half, and the pathetic state of urban infrastructure, the proliferation of large format retailers will only accelerate the undesirable trends of predatory real estate development and unsustainable pressures on urban infrastructure and the environment. Rather than enhancing choices for the consumers, especially the lower income groups, proliferation of large format retail stores would kill competition, lead to closure of neighbourhood markets and make consumers solely dependent upon the organized retailers. This would also increase the propensity to use private vehicles for shopping thus leading to more pollution. Regulation of the organized retail sector has to address all these areas of concern mentioned above. Organized retail cannot be allowed to grow in a way, which displaces existing unorganized retailers, jeopardizing livelihoods in the absence of other employment opportunities. The interests of the small producers, especially farmers, also have to be protected by preventing the emergence of local monopolies/monopolies. It has to be ensured that competition is not stifled and potentially monopolistic practices in credit, input and output markets are not encouraged by the entry of large corporate retailers. Moreover, undue pressure on urban infrastructure and the environment arising out of the proliferation of large format retailers has to be prevented.
11 INDIA SCENARIO
12 INDIA SCENARIO
Mall and Shopping Centre development is a direct function of the health of the country’s Organised Retail industry and the Real Estate sector in general. Organised retailing, as we know has taken-off to a flying start and is projected to grow at the rate of 37 percent in 2007 and 42 percent in 2008. Fortunately enough, the Real Estate story is equally encouraging, especially after the relaxation in FDI norms in 2006 and the enthusiasm of Indian corporate houses in mega Special Economic Zone (SEZ) projects The real estate story in India is now growing bigger by the day. Industry experts are optimistic that there exists huge demand potential in Indian real estate in almost every sector – commercial, residential and retail. In the last couple of years the growth in commercial office space has been fuelled by the burgeoning demand for space in the outsourcing and information technology (IT) industry. By 2010, the IT sector alone is expected to require 1,500 lakh sq.ft of space across major cities. Growth in the services sector, accompanied by impressive growth in the overall gross domestic product is sure to generate commensurate growth in demand for residential space as well. It is estimated that in the residential sector there is a shortage of 194 lakh units out of which 67 lakh are in urban India. The increase in purchasing power and exposure to organised retail formats has redefined the consumption pattern. As a result, retail projects have been mushrooming across even teir-II and tier-III cities. The retail market is expected to grow at around 35 percent. Industry observers feel that this growth is facilitated by favourable demographics, increasing purchasing power, existence of customer-friendly banks and housing finance companies, professionalism in real estate and reforms initiated by the Government to attract global investors.
13 RETAILERS AND MALLS
India has emerged as the most attractive destination for retailers in 2007. According to he latest AT Kearney study, for the third year in a row, India leads the annual list of most attractive emerging markets for retail investment followed by Russia and China. Organised retail, which currently accounts for only 4.6 percent of the Rs.1,200,000 crore (US$270 billion) Indian retail sector, is expected to grow at 37 percent in 2007 and 42 percent in 2008, according to IMAGES India Retail Report 2009. The report adds that organised retail in India has the potential to add over Rs.1,00,000 crore (US$45 billion) business by the year 2010.
This is expected to create a demand for around 2,200 lakh sq.ft of retail space by 2010. According to industry estimates, 270 lakh sq.ft of organised retail space is currently available. Another 900 lakh sq.ft is expected to be added by 2008 from 263 mall projects. Of these, 180 lakh sq.ft is slated to come up in Delhi as well as in Mumbai, 95 lakh sq.ft in Ludhiana, six lakh sq.ft in Chandigarh and 36 lakh sq.ft in Ahmedabad. With the retail sector experiencing a boom, the country is witnessing a spurt in extremely large retail spaces. Shopping malls with over 10 lakh sq.ft of space have become the order of the day. About 20 of these are now at various stages of construction across the country. In the National Capital Region (NCR),Unitech's Great India Place has a million sq.ft of retail space. In Mumbai, at least eight malls covering over 10 lakh sq.ft each, including R-Mall at Ghatkopar, and two malls of over 10 lakh sq.ft, proposed for Thane. In Bangalore, at least three malls with similar dimensions are under development. Ludhiana will soon have a 16 lakh sq.ft mall by Today Homes.As the competition in the market intensifies, mall developers are trying out all possible ways to be different. Specialised malls, designer brands and multi- movie options are marking the shopper's day out.Gurgaon, on the suburbs of New Delhi, has a jewellery mall and will soon have an auto mall. Bangalore will get an exclusive furniture mall. Two malls, first of their kind, targeting foreign tourists, will come up 14 at tourist hotspots – Goa and Udaipur – with a projected cost of around Rs.90 crore (US$22 million) each. A furnishings mall is coming up on Elgin Road in Kolkata. And India's largest theme amusement park, Noida Entertainment City (E-City), will stand upon 65,34,000 sq.ft (150 acres) approximately. Discount malls are also on the rise. Top realtors and local retail chains are developing malls in regional boroughs, specifically to sell premium branded goods at prices 30-40 percent cheaper than the maximum retail price. At least 50 discount malls are expected to come up in the next two years across the country, positioned in the middle-to-the- premium end of the market.In what could perhaps become a trend in the booming retail business, Reliance Retail, Future Group and Bharti-Wal-Mart are among leading retail companies that are acquiring housing societies and colonies in Ahmedabad to knock down and build mega-retail stores.
15 MALL MANAGEMENT
BIG DEALS IN REALTY 16 The biggest mall of the world – Mall of India – planned by DLF Universal along NH-8 – will have 32 acres (13,93,920 sq.ft) spanning a huge entertainment area and large city town squares offering a total retail experience. Chennai, on the radar of foreign real estate funds, recently witnessed two big-ticket property deals. AIG DLF Universal along Real Estate Fund and RMZ Corporation purchased an 11-acre (4,79,160 sq.ft) plot at Guindy for Rs.2,816 crore (US$686.9 milion) and Shyam Kothari, in another deal, bought IDBI's 2.5 acres Boat Club property in Chennai for Rs.165 crore (US$40.3 million). A large number of retailers, which also includes traditional retailers, are now planning to expand within NH-8 the current city, and a good percentage of them are also willing to open new stores in other cities within India.The most confident among them are home and interior retailers and sports apparel/equipment retailers, followed by department stores and jewellery and food retails. Space within upcoming malls will obviously be the first choice. The last decade saw the transition of sleepy towns like Gurgaon, Noida and Faridabad into enviable retail addresses, and today these are classified as tier-I cities along with the core, NCR in this case. These cities are now almost saturated. Naturally, the opportunity in the tier-IA, tier-II and tier-III cities – like Hyderabad, Cochin, Chennai, Coimbatore and Pune – is equally enormous. For instance, Pune, the engineering and automobile hub of western India – about 160-km south-east of Mumbai – is emerging as a major IT centre. With sprawling software parks coming up all over the city and its suburbs, the demand for high-value apartments is growing and so is the potential for shopping centres.
17 Beyond professionals and people looking to relocate from Mumbai or even overseas, are the older people who have sold a bungalow and want to live in spacious,but easy-to-manage surroundings. Developers maintain that the bar for the super-premium luxury housing has risen from Rs.9,511,938 (US$231,964) to over Rs.19,023,918 (US$463,929) per unit. If the year 2006 was marked by some of the country's biggest land deals, the future of India is set to usher in the gold rush of realty.
18 MACROECONOMIC FACTORS AFFECTING DEMAND AND SUPPLY OF REAL ESTATE
Economic Growth
Sustained growth has made India the world’s fourth largest economy in terms of purchasing power parity.Forex Reserves of US$175 billion (Dec 06) (source:Reserve Bank of India), current GDP growth rate of 9.2 percent, positive market sentiment and business optimism are expected to make India’s GDP the third highest in the world by 2020 (source: KPMG). Economic growth over the past three years has been consistent with an average annual growth rate of eight percent (Above Fig) and, as this growth is led by investments in the economy, it is likely to be more sustainable than earlier spurts in GDP growth. The agriculture sector has minimal effect on retail real estate in India; hence a slowdown in agriculture doesn’t affect the sector in a major way. The manufacturing sector, which is growing at 11 percent (source: Economic Survey of India 2006-07), has a positive impact on industrial real estate but its effect on commercial real estate is marginal. It is primarily the services sector that accounts not only for the majority of office space absorption in India, but also fuels the growth in the residential and retail sector.
19 GOOD MANAGEMENT STARTS AT THE TOP
There is a lot of discussion in the shopping centre industry as to the duties and obligations of the effective shopping centre manager. However, in order for the manager to be effective, the shopping centre owner has to set the table with a well developed and leased shopping centre, state of the art facilities, clearly stated goals, and clear policies and procedures to provide the proper environment.
The management demands of a shopping centre are substantially beyond those of an office building or an apartment complex. These responsibilities are best handled by a professional shopping centre manager; either an experienced staff person or an outside third party consultant with experience in the operation of shopping centres. The less experience the owner has in shopping centre management and/or ownership, the greater the need for an experienced manager. A background in office building or apartment management is not sufficient for a full charge shopping centre manager, especially in the super charged environment of the Indian shopping centre market.
20 SHOPPING CENTRE CATEGORIES There is often a question as to the differences between managing a very high- end shopping centre and one that is aimed more at the middle to lower end of the economic spectrum. Generally, day-to day management is the same for both with a few exceptions. High-end centres most often have much higher level of finishes, fewer kiosks, less banners and fewer amusements for children. In the high-end centre the atmosphere is generally very serene, it may have substantial artwork, and a very high level of cleanliness and maintenance. Additionally, restaurants and food operations are more high-end and there are more personal services provided High-end centres will almost always have valet parking, where a middle market centre may or may not offer that service.High-end centres will often have concierge services as do many middle centres, but in the high-end centres they will often provide buying assistance, registration for gifts for weddings and showers, package carryout, tickets to major entertainment events and even in one case, transportation to and from the mall upon request. High-end merchants are quite willing to pay higher rents and service charges, provided they are able to generate sufficient volumes to support those costs. It is incumbent upon the owner to be sure that there are sufficient trained personnel to meet the needs of the shopping centre. management is most often off site, involves multiple smaller centres, and most often operates from the owner's main office. Most often the maintenance, security and marketing functions are handled by contract services. Accounting is most often done in the home office as is lease administration.The manager reports direct to the owner or the asset manager depending on the structure of ownership. The manager, in this case, is responsible for all aspects of the centre's operation and has little staff support for any of his or her activities. This is truly a 'hands on' manager.
21 Mall Organisation
A larger property, or mall, will have a full-time on site staff. Generally, everything but leasing will be under the general manager's control. Most often monies will be collected on site, but in some larger companies rents will be sent directly to the home office. The manager will have an experienced staff to take care of the various modules of management, including security, marketing, maintenance and fiscal responsibilities – such as reports to owners and lease administration.
Multiple Mall Organisation
In the ownership of multiple centres we see a slightly more sophisticated management model. (See Exhibit C) The on site operation is very similar to the major mall management, but there is the main office in the form of very experienced personnel in the areas of marketing, security, administration and maintenance to provide advice and services to all of the shopping centres in the portfolio.With the proper staff in place the attention can then be turned to those factors that create the proper environment for successful centre management.
22 23 FACTORS FOR SUCCESSFUL SHOPPING CENTRE MANAGEMENT
There is an expectation that the owner/developer will have chosen a good location for the shopping centre and that the centre will be well designed and well constructed. The developer/ owner will be expected to create a good tenant mix, provide professional management and promote the centre in order to generate maximum appeal to the centre's customers.
Technology Tools
The astute developer/owner will provide all of the most up-to-date tools and technology to facilitate the efficient operation of the shopping centre. Those tools will include computer programmes to provide the oversight and control the maintenance of the shopping centre.Such programmes as 'Aware Manager provide the management with a comprehensive maintenance management system.The system will include work order or service request servicing with follow up capability. The programme sets up preventative maintenance schedules and issues reminders as the dates approach. Scheduling and purchasing are also modules within the system, as is the tracking of insurance certificates and all correspondence relative to the maintenance function.
Administration Programme
An effective administration programme will include lease summaries for all of the leases within the shopping centre, to include all lease changes and/or options during the lease term. Any early termination dates will be flagged and a reminder issued. The comprehensive accounting and lease administration package should have interface modules
24 FACTORS FOR SUCCESSFUL SHOPPING CENTRE MANAGEMENT
There is an expectation that the owner/developer will have chosen a good location for the shopping centre and that the centre will be well designed and well constructed. The developer/owner will be expected to create a good tenant mix, provide professional management and promote the centre in order to generate maximum appeal to the centre's customers. Technology Tools
The astute developer/owner will provide all of the most up-to-date tools and technology to facilitate the efficient operation of the shopping centre. Those tools will include computer programmes to provide the oversight and control the maintenance of the shopping centre.Such programmes as 'Aware Manager' provide the management with a comprehensive maintenance management system. The system will include work order or service request servicing with follow up capability. The programme sets up preventative maintenance schedules and issues reminders as the dates approach.Scheduling and purchasing are also modules within the system, as is the tracking of insurance certificates and all correspondence relative to the maintenance function.
Administration Programme
An effective administration programme will include lease summaries for all of the leases within the shopping centre, to include all lease changes and/or options during the lease term. Any early termination dates will be flagged and a reminder issued. The comprehensive accounting and lease administration package should have interface modules for accounts payable and receivable, check writing and vendor maintenance files. A state-of the-art system will have a module for the writing of the monthly management reports and a spread sheet programme for the preparation of the budgets and follow up accounting reports.
25 Utility Management
Spreadsheet programmes are very effective in the setting up and tracking of budgets, common area allocations and the tracking of tenant sales. A comprehensive utility package is a must for all larger shopping centres. Utilities, including air conditioning most often account for a very large percentage of the operating expenses and a good oversight programme will control the usage to optimise the system. State-of- the-art equipment should be provided to maximise security effectiveness which may well include any needed site vehicles for patrolling the parking lots, two way radios, television monitoring of
ROLE OF THE MALL MANAGER The centre owner is obligated to operate the shopping centre in an effective manner and that is accomplished through the manager. The manager will be expected to interface with the owner/developer,lenders, tenants, customers, contractors, city officials insurance providers and centre personnel. This is no small task as the ability to communicate well with this diverse group of people is difficult and demanding.
Value Enhancement
The effective manager's main job is Value Enhancement. There are any numbers of ways this can be accomplished. The astute manager will spend a large amount of his or her time visiting with the merchants to see how they are doing and what is working for them and what is not. Along with being fully aware of the tenant's sales figures, this puts the manager in a position to advise the owners of which tenants are doing well, and why, and which ones are not doing well. This will help the owner in making leasing decisions.
26 Cost Management
The manager will be expected to maintain the property, at all times in first class condition, but at an effective cost. One may argue that these expenses The manager will be expected to provide accurate and timely accounting to both the owners and the are passed along to the tenants and therefore is not that critical, but the astute tenant is looking at his or her occupancy costs at each location and may well not lease a new store or renew a lease where the expenses are out of line with the competition.
Maintenance
Each customer coming into the property will expectfirst class cleanliness and state of repair. The manager will be expected to maintain the property in a safe and secure manner. If there is a perception that the centre has a high level of crime, rowdy teenagers, or that there are an inordinate amount of car thefts or accidents on the property,customers are likely to go elsewhere. Additionally, the manager will constantly inspect the property to be sure that it is receiving the proper maintenance to minimise or avoid major repairs.
Accounting
This includes the timely collection of monies owed to the shopping centre. Money has a time value and if collections are allowed to build up, the owner is losing the cash flow and the added value that those funds would represent. and timely accounting to both the owners and the manager.
27 Mall Security
Most large shopping centres today start with a strong security presence. One can argue that this gives the feeling that there is a problem, but the truth is that a strong security presence will almost assure that there will not be problems. It is much easier to prevent security problems than it is to correct them after the fact. Security can be anything from officers in blazers and slacks with a radio as their main tool to full military uniforms with mace or guns as their main tools. This will depend on the nature of the society, the trade area of the shopping centre and the nature of the risks involved. Because of past problems, some shopping centres in Istanbul have metal detectors at the entrances. It would not be their first .The manager will be expected to provide accurate tenants. This includes the timely collection of monies owed to the shopping centre. Money has a time value and if collections are allowed to build up, the owner is losing the cash flow and the added value that those funds would represent.
Marketing
The manager will be expected to provide effective and timely marketing programmes, evidenced by growing sales for the centre as a whole. Marketing is one of the more difficult aspects of management to measure and evaluate, but the manager must be aware of the competition, the sales within his or her centre and make a reasoned decision as to the expenditure of marketing dollars. By talking with merchants after each marketing event, the manager should get a good idea as to what is working in that market and what is not and tailoring future programmes in the direction of past successes.
28 Tenant Programme
An effective temporary tenant programme is essential for the good management of any larger shopping centre. This includes vacant spaces being utilised until they are leased to a permanent tenant as well as kiosks, wall shops and cart vendors. The income from this source alone can make a major contribution to the financial success of any shopping centre. The manager will be expected to enforce the lease provisions equally among all of the tenants in the centre. If this gets out of hand where some merchants feel they are not getting a fair deal, they are likely to move when the lease expires. Turnover is expensive for a shopping centre, especially when it is caused by poor management.
29 CONCLUSION
The centre owners have the ultimate responsibility for these activities, but they are best handled by an experienced shopping centre professional. The owners requirements are set forth in the operating policies and procedures, the owners goals and the limitations on the managers responsibility and authority. These must all be clearly conveyed to the centre manager.The manager should be given authority commensurate with the responsibility to get the job done, but should also be subject to frequent reviews and to objective evaluations against the set standards.The owners should not interface with tenants to the degree that it renders the manager ineffective. Decisions beyond the manager's authority must be presented to the owners and the owners must provide timely decisions or the tenants will feel no one cares, especially the manager.
There is no one more concerned with the long-term welfare of the shopping centre than is the owner. However, the typical owner is a very busy executive creating new projects and making major decisions. The day-to-day management is best left to a shopping centre professional in the area of management, with strong ownership support and with realistic limitations and continuous evaluation. Stated in terms of an old business axiom: 'trust, but verify'.
MALL DEVELOPMENT: A PROCESS STUDY 30 SOME OF THE BIGGEST MALL IN INDIA
• Ansal Plaza Mall
• Centre Stage Mall
• Cross Road Mall
• City Centre Mall
• DLF Mall
• The Great Indian Place
• Gold Souk Mall
• Spencer Mall
• Sahara Ganj Mall
31 HIGH STREET PHOENIX
32 ABOUT HIGH STREET PHOENIX
High Street Phoenix, (HSP) the first consumption centre developed in India, covers 3.3 million square feet of space and houses over 500 brands , variety of F&B, entertainment, commercial and residential complexes. Pioneered by The Phoenix Mills Co.Ltd. and led by young Managing Director, Atul Ruia and his team of professionals. At HSP, each zone has been specifically designed and been put together in keeping with international experience and an answer to emerging urban agglomerations typically defined as ‘mixed used developments’.
HSP in keeping with its proposition of ‘A Day Well Spent’, hosts stores in leading national and international brands. It premiers a large choice in all most every category be it clothing, appliances, accessories, jewellery or home decor and for every taste a lip-smacking food court peppered around with various kiosks such as books, a balloon store, ice candies and snacks. The consumption centre has 2 distinct shopping zones viz Skyzone which caters to women and the young urban shopper. Grand Galleria which hosts stores that meet the impulse and aspirational shopper. The zone is connected to the multiplex having a 2000 seating capacity with 7 digital screens. The heart of the centre defined as The Courtyard acts host to all the fun and action taking place. The F&B segment asethically designed in the shape of ribbons promises to be a gastronomical delight offering both local, national, international treats. Located near it is the dining and seated area giving shoppers’ time to repose and rejuvenate and savor what the centre offers.
As an added extension to its various offerings, HSP has an added another level HSU Units, which as a more mixed blend of offerings from jewellery, sweetmeats, ethic artifacts, an opticians and a greetings and gift store.
33 Last but not the least, is a fun zone for children, Orama that hosts the tallest 70 foot drop tower, and other games adding to the delight and mirth of the centre .
In the offing is the too be launched soon and the first of its kind super premium/luxury destination in India, appropriately christened, ‘Palladium’ will be launched shortly. The centre boasts of a 1300 car park area making it one of the largest in the city. All in all there is something for everyone giving them an experience and value to be cherished and a day well spent.
34 HISTORY
Ruia’s – a brief history
The name ruia originates from ‘Rui’, which means cotton, and likewise, the business history of the ruia family began with cotton trade. Mr. Ramnarain Ruia’s futuristic approach took the family’s business interest to a manifold growth. The family’s primary interest was in the field of cotton textiles. The family tree of the Ruias is as under:
Mr. Ramnarain Ruia acquired the Phoenix Mills, the Dawn Mills, and the Bradbury Mills thereby asserting the family as an integral part of the textile business. With a continuing effort to dominate textiles, R. R. Hosiery and R. R Textiles were set up for the manufacture of knitted cloth and garments.
The family also made its foray in the field of dyes, chemicals, pharmaceuticals, agriculture, footwear and sugar. Color Chem., Indo Chem., Raptakos Brett, Kolhapur Sugar Mills, Noble Steel, Bombay Oxygen and Carona Shoes were also set up with the support of the Ruia family. The erstwhile Ruia Krishi Kendra, agriculture division was involved in grape farming and dairy.
The family was also instrumental in setting up ‘The Union Bank of India’ and ‘The New India Assurance’, which as of date are considered as one of the most premium institutions. Pursuant to nationalization of the banking and the insurance sectors, the family was forced to surrender these companies.
Along with the business activities the ruias also contributed substantially to philanthropic purposes. The Ramnarain Ruia College, Matunga, founded in 1936 is presently one of the leading science colleges in Mumbai. The family has also contributed to a girl’s school at Andheri and girls school/college in rural Rajasthan.
35 Apart from these educational institutions, the family has also contributed to a cancer hospital at Tirupati.
In the world of sports, the Ruia family has strived to do its best to promote games like Bridge, Badminton, Table Tennis, Golf and Horse Racing. In particular, in duplicate Bridge, the family helped to bring India to the international circuit by hosting tournaments and sponsoring events.
36 CUSTOMER PROFILE
A survey undertaken at High Street High Street Phoenix reveals some interesting characteristics about the nature of shoppers who frequent High Street Phoenix.
High Street Phoenix is popular for its shopping arcade with its stores in clothing, fashion accessories, home décor and the like- traditionally considered to be a female domain. At High Street Phoenix however, male shoppers outnumber female shoppers, what with the food and entertainment zones tingling their tastes and taste buds.
The shoppers are primarily those who have the money and enjoy living it up. They fall in the age bracket of 18 to 35, with a huge following in students and new wage earners with well-paying jobs. They are the free-spirited souls, mostly unmarried, who frequent the place whenever they find the time or need a break or just wanna hang out.
The most popular reason for their affinity to High Street Phoenix is the fact that most of their family and friends they want to spend time with and enjoy with, endorse it. Being a family get- away and a popular hang out among the GenX, catering to a wide range of tastes, preferences and pockets makes it very easily a popular choice for a day out or an evening out.
The average individual spending at High Street Phoenix ranges anywhere between Rs.500 and Rs. 2,000 notching a much higher figure for family spendings. A proportionately large number of shoppers travel over 10 km to visit High Street Phoenix, their favourite mode of transport being their private vehicle. 37 The typical shopper at High Street Phoenix falls in the Socio Economic Class A & B (SEC A and B) who has a pocket and a mind of his own. He knows what he wants and he knows High Street High Street Phoenix is the best place to get it!
TEAM OF DIRECTORS
Mr. Ashokkumar Ruia --(Chairman & Managing Director)
Mr. Atul Ruia --(Jt. Managing Director)
Mr. Pramod Rawool --(Whole time Director)
Mr. Bharat Bajoria --(Independent, Non-executive)
Mr. Anand Bajoria --(Independent, Non-executive)
Mr. Amitkumar Dabriwala --(Independent, Non-executive)
Mr. Amit Dalal --(Independent, Non-executive)
Mr. Shivramkrishnan iyer --(Independent, Non-executive)
Mrs. Priti Khimji --(Independent, Non-executive)
Mr. Suhail Nathani --(Independent, Non-executive)
Mr. Shribhanu Patki-- (Independent, Non-executive)
38 ANSAL PLAZA
39 ABOUT ANSAL MALLS
Ansal Plaza is the oldest mulifacility, multispeciality, shopping mall of New Delhi. This World Class, at Khel Gaon, New Delhi has an ampitheatre, a shopping complex and twin basement parking - all to pamper the new age Shopper. Covering an area of 35 acres, with International Brand at its doors, Ansal Plaza has completed five years of establishment. Painted in starking Red and Blue, the building of Ansal Plaza, attracts people from quite a distance.
Fast Facts
»Location-Khel Gaon, South Delhi, New Delhi »Accessibility-Bus Services, Cabs - Easily reachable by road. »Parking Lot - One Large Underground Parking Space and a lot in the ground floor. »Visit Timings - 11: 00 a.m. to 10:30 p.m. *Timings are subject to vary. »Speciality - The Amphitheatre Design which gives it a beautiful look not found anywhere else.
40 Famous Facets:
The Brands
With the Top International Brands coming to this Delhis Oldest Shopping Mall, Ansal Plaza still holds the attraction of the old days. The small rounded lanes make it more beautiful
The Round Lobby
This Round lobby in the Ansal Plaza is a good place to sit down for some time. With Greenery, a large LCD Screen and water fountains all around its a good place to chat or to take a few relaxing moments while shopping.
41 The Mall This Contemporary piece of Design - Ansal Plaza is filled with greenery and fountains. This amphitheatre structured shopping Mall has an array of brands under its roof. Ansal Plaza has four floors in a semi - circle. Several popular brands, entertainment centres and mini playgrounds for children sprawl the mall. In the entire Ansal Plaza, on all the floors there are fountains, water cascades and environmentally controlled temperature. The lobbies and passages are furnished with granite and marble flooring, making the shopping mall look more attractive. Retail Brands like Adidas, Levis, Color Plus, Reebok, United Colors of Benetton, Weekender, The Book World have their own place in Ansal Plaza. Restaurants and food courts like Cafe Nescafe, Subway, Mc Donalds, Amorettos, Hot and Juicy serve their best.
Built in a semi - circular fashion, it has a centre stage with a number of fountains. As you step up the stairs of the mall, there is a range of brands displaying their blends. The second and third floors are filled with Corporate Houses. These floors are connected with elevators.
In Ansal Plaza there is a two level basement parking lot. The upper level can accomodate upto 700 cars while another 300 cars can be spaced up in the lower level
42 Around Ansal Plaza
»South Ex Part I AND II : South Extension happens to be one of the most Buzzing Shpping Complexes of South Delhi. With Top brands like VLCC, Woodland, Lacoste, The Book Mark, TagHeuer, The Moti Mahal Deluxe, The Dar Saloon, Wills and HSBC, HDFC Banks it is the Shoppers Favourite. From 10 o'clock in the morning to the 11: 30 in the night, it is buzzing with people all the time
» Lajpat Nagar : For those who are looking for International Brands cum fairly reasonable price, Lajpat Nagar is the place to go for. Shahnaz Husain, Ritu Wears, West Side, Woodland, Bata, Liberty, Mc Donalds, Pizza Hut, State Bank Of India - all run their shows here.
» Delhi Haat : The most welcoming place and Shopping Hub for any newcomer of Delhi. A clear view of all the shopping things from different states of India are showcased here, in Dehi Haat of South Delhi. Shop from here the various artifacts of Indian States, as you savour the delicacies in the food courts here.
Suggestions:
• Ansal Plaza despite of being the oldest Mall of Delhi City has the best brand under its roof. It has kept in with the changing times by welcoming the latest brands in its shops. • There is enough parking space to Park your own vehicle. Also there are lifts to cover all the floors uptill the underground parking. • Fast Food is easily available. With likes of Mc Donalds bringing along kids cannot be a huge problem.
43 • You can drop your hat while shopping in Ansal Plaza, seeing the variety of Brands here. From traditional to ethnic - there is a whole range of clothes. • Spring season is the best time to visit Delhi. Be here in this season to enjoy the best. Shopping can fun in this time with malls early in the morning .
• There is no need to carry any extra baggage, as the Delhi City has all that is required - International Malls, Shopping hubs, International Hospital, 24 Hrs Open Medical Shops, Restaurants and Bars. • Delhi Haat, Sarojini Nagar, Lajpat Nagar and South Extension are some of the famous malls of Delhi. Apart for this, there are a number of Historical places to see in Delhi - Qutub Minar, Lotus Temple, Red Fort, Akshardham Temple, India Gate, Cannought Place, Chandni Chowk, Jama Mazjid, Humanyus Tomb and Raj Ghat • All sorts of food - Indian, South Indian, Chinese, Mexican and Continental all is easily available here. Hotels from three star to five stars add to the Delhi attractions.
44 SHOOPNG MALLS OF LUCKNOW
FUN REPUBLIC MALL
45 SAHARA GANJ MALL
THE EAST END MALL
46 INOX MALL
SHOPPING MALLS IN LUCKNOW
This page gives an account of different shopping malls in Lucknow, which had firm cultural links from medieval time of the Nawabs. Apart from shayri (poetry) and mujras(dance performance), the noble city of Lucknow has been famous for cotton textiles and chikenkaari work from the ancient times. Lucknow perfumes are well known in India. There are lavish shopping malls in major shopping areas of Lucknow. The major shopping areas or market are Yayaganj, Aminabad, Kapoorthala, Janpath,Chowk and Hazratganj. There are numerous big and small restaurants and eating handouts around these famous market places. One can get mouthwatering non-veg dishes and enjoy rich delicacies at an affordable price. Lucknow is famous for Biryanis and travelers can get plentiful shops selling this favorite dish. Otherwise Shikawat near Gymkhana Club and Tunde ke kebab in Chowk are two well known shops to the locals.
The two important shopping malls in Lucknow are the Zee Mall (Fun Republic) and the East End Mall (Wave) in Gomti Nagar and Sahara Ganj near Shahnazaf Road, Hazratganj that is visited by more than thousands visitors daily. Aminabad, can be compared to Chandni Chowk in Delhi and is the largest shopping centre of the city daily visited by a huge number of consumers.
The Hazratganj market has a big shopping area where the buildings are of colonial style buildings. Malls like Riverside - Pyramid has lavish shops and showrooms of reputed brands do a good business in Lucknow. A number of multiplexes like PVR , Wave, Sahara Ganj and Fun Cinemas beside or inside the shopping malls of Lucknow offer world class movie watching experience to the visitors. Other shopping centers of Lucknow are Chowk Old Lucknow, Alambagh, Bhootnath and Kapoorthala,
47 SHARA GANJ
48 SAHARA GANJ MALL
In the state of Nawabs, the Sahara Ganj Mall looked like a fanfare. It was opened by the chief Minister of Lucknow amongst a lot of pomp and Show. Awarded with 49 Unique Disabled, Friendly Initiatives, it has come out as a major project of Sahara Group. Built in an area of 525, 000 sq. ft. It is considered as one of the most expanded, massive and mammoth construction of Lucknow City. Being the first Shopping Mall of Lucknow, it has more attraction attached to it then most of the malls around the country.
Fast Facts
» Location - Sahara Ganj; Shahnajaf Rd, Hazratganj, Lucknow » Accessibility- Cabs, Local Transportation and Own Vehicles »Parking Lot - One Large Underground Parking Space » Visit Timings - 11: 00 a.m. - 11:00 p.m. »Speciality - Accolades for Disabled People Concerned Design and Facilities
Famous Facets:
50 CNBC Award on World Disabled Day The Sahara Ganj City Mall, was awarded with the BEST MALL for providing ease to the disabled people. It was the first shopping mall coming up with the idea of providing path and facilities for the disabled to come and shop at their own ease. The Award was given by the Uttar Pradesh Government. CNBC Awaz accloded the same.
PVR
Its the famous Movie Theater which runs the shows all through India. Here too it has a 4 Screen, state of art theater. With International Standards it is one of the best things around. With a small Cafeteria of its own serving snacks and beverages and a small place for Children to play, this PVR at Sahara Ganj Mall represents the best out of sources.
THE MALL
51
Covering an Area of 525, 000sq ft and for floor including the ground floor, the Sahara Ganj Mall is filled with a massive central area, spacious corridors and designer lifts. The Mall has the highest security, providing the customers with the most comfortable and soothing environment for shopping. McDonald's, Copper Chimney, Barista, Bombay Blues to Moti Mahal of Delhi and the Tunde Kebabi of the 'City of Nawabs are some of the names which can be seen in the Sahara Mall Of Lucknow. It is one of its kind Mall which is open 365 days of the year including the leading life style brands like Marks-n-Spencer, Big Bazaar, Pantaloons, Pepe, Levis, Reebok, Lee Cooper, Rado, Gucci, Gess, Next, PVR , Toy Story, Timex, Indigo National, Pro vogue and Planet Sports.
Big Bazar and Pantaloons are the main anchors of the Mall. The Sahara Ganj Mall also has the PVR in its one side with 4 screens running at a time.
Around Sahara Ganj Mall :
52 »River Side Mall : Opened after the Sahara Ganj Mall, it is one of the Major malls of Lucknow. It too houses the best brands in the country with food courts and parking in its proximity.
» Fun Republic : This Multiplex has the Movie theater cum the lifestyle Shops to shop from. From various indoor games like pool and bowling it houses the top brands like Planet M, Mc Donalds, Lois Philip, Koutons, Allen Solly and the Reebok. More brands are adding in the shopping list day by day.
»Bada Imambara : This Historical Destination is one of the major tourist attractions of the Lucknow City.
Suggestions For Lucknow City :
• Sahara Ganj Mall is the first Shopping Mall, Lucknow City has. Not only an eye catcher of the local residents, it has grabbed accolades from ousuders too. With inbuilt State of Art of facilities, shopping can be a pleasent experience. • Its the best place to shop from for disabled people. The path, parking and the counters have been made with an eye to make the Shopping Eperience for the disabled a memorable one. • Keeping in view the hunger pangs one has while shopping, a number of food courts have been lined up for a easy shopping day. • Bring along your children - for there is enough space to keep them engaged. • Lucknow, the City of Nawabs and Kebabs has a lot of History, still retained in its yellow pages. There are a number of places around the city which remind of the forelone years. Chota Imamabara, Bada Imambara, St. Francis College, Ambedkar Memorial, Roomi Gate, Husainabad Clock Tower are some of the wonderful tourist destinations Lucknow has.
53 • The Food and Cuisines of Lucknow are world famous. Dum Pukht ( Low Frying) Cuisines, Makkhan Malai, Kesar Pista Biscuits, Chaat, Biryanis are some of the famous foods of Lucknow. Lucknow city also has the best caterers in the town - Shukla Chaat in Ganeshganj, Moti Mahal, Radhey Lal in Aliganj Chhappan Bhog in Sadar and Mahesh Sweets in Nirala Nagar are the famous names of Lucknow. Other s like 'Oudhyana' 'Zaika' 'Royal Cafe' 'Falaknuma' 'Dastarkhwan' 'Daal Mein Kaala' 'Naushi-Jaan' serve the true flavours of Lucknow Nawabs. And when you are in Lucknow don't forget to try the Lucknawi Paan. • Winters can be quite chilly, so if you are planning to visit the city in the months of December and January, fill your bags with warm clothes.
54 FINDINGS
55 2. When asked what are the things they liked about shopping malls?
Response in percentage
price and service variety shopping environment & cleanliness
0%
20%
51%
29%
56 3. When asked, Where do they do their regular monthly shopping?
Response in percentage
come to the shopping malls go to the small retailer
0% 0%
45%
55% 4. When asked whether they are aware of the condition of the small retailer due to theses shopping mall
Response in percentage
people said yes people said no people said they don’t know
10%
23%
67%
5. When people from the young age group were asked where they prefer shopping and why, this is what we found?
Response in percentage
of them preferred shopping in malls: price, environment and variety where the main factors according to them. of them preferred shopping in small retail outlets: distance of the shop from their home, shopping habits were the main reason according to them.
11%
89% After interviewing 10 small retail shop owner from various parts of the city this is what I found
1. shop owners when asked about the effects on their business when ever there is a shopping mall around the area
Response in percentage
said it affects their business very badly said it doesn’t affect their business
5%
95%
2. When asked, who according to them are the customers who are still loyal to them
Manily People of the older age group for whom distance from there home is a prime factor and the customer with whom they had a very good and long relationship are the ones who are still loyal. 3. When asked about the strategies they are adopting to fight with the situation?
4. When asked should the government interfere in between and give them protection?
Response in percentage
said yes, the government must act at once and give them some protection. said they don’t know
3%
97% SWOT Analysis of retail(shopping malls)…
A SWOT analysis of the Indian organized retail industry is presented below:
Strength:
1. Retailing is a " technology-intensive" industry. It is technology that will help the organized retailers to score over the unorganized retailers. Successful organized retailers today work closely with their vendors to predict consumer demand, shorten lead times, reduce inventory holding and ultimately save cost. Example: Wal-Mart pioneered the concept of building competitive advantage through distribution & information systems in the retailing industry. They introduced two innovative logistics techniques � cross- docking and EDI (electronic data interchange).
2. On an average a super market stocks up to 5000 SKU's against a few hundreds stocked with an average unorganized retailer.
Weakness:
1. Less Conversion level : Despite high footfalls, the conversion ratio has been very low in the retail outlets in a mall as compared to the standalone counter parts. It is seen that actual conversions of footfall into sales for a mall outlet is approximately 20-25%. On the other hand, a high street store of retail chain has an average conversion of about 50-60%. As a result, a stand-alone store has a ROI (return on investment) of 25-30%; in contrast the retail majors are experiencing a ROI of 8-10%.
2. Customer Loyalty: Retail chains are yet to settle down with the proper merchandise mix for the mall outlets. Since the stand-alone outlets were established long time back, so they have stabilized in terms of footfalls & merchandise mix and thus have a higher customer loyalty base. Opportunity :
1. The Indian middle class is already 30 Crore & is projected to grow to over 60 Crore by 2010 making India one of the largest consumer markets of the world. The IMAGES-KSA projections indicate that by 2015, India will have over 55 Crore people under the age of 20 - reflecting the enormous opportunities possible in the kids and teens retailing segment.
2. Organized retail is only 3% of the total retailing market in India. It is estimated to grow at the rate of 25-30% p.a. and reach INR 1,00,000 Crore by 2010.
3. Percolating down : In India it has been found out that the top 6 cities contribute for 66% of total organized retailing. While the metros have already been exploited, the focus has now been shifted towards the tier-II cities. The 'retail boom', 85% of which has so far been concentrated in the metros is beginning to percolate down to these smaller cities and towns. The contribution of these tier-II cities to total organized retailing sales is expected to grow to 20-25%.
4. Rural Retailing: India's huge rural population has caught the eye of the retailers looking for new areas of growth. ITC launched India's first rural mall "Chaupal Saga" offering a diverse range of products from FMCG to electronic goods to automobiles, attempting to provide farmers a one-stop destination for all their needs." Hariyali Bazar" is started by DCM Sriram group which provides farm related inputs & services. The Godrej group has launched the concept of 'agri-stores' named "Adhaar" which offers agricultural products such as fertilizers & animal feed along with the required knowledge for effective use of the same to the farmers. Pepsi on the other hand is experimenting with the farmers of Punjab for growing the right quality of tomato for its tomato purees & pastes.
Threats :
1. If the unorganized retailers are put together, they are parallel to a large supermarket with no or little overheads, high degree of flexibility in merchandise, display, prices and turnover.
2. Shopping Culture: Shopping culture has not developed in India as yet. Even now malls are just a place to hang around with family and friends and largely confined to window- shopping. Recommendations
Framework for a National Policy on Regulating Organized Retail
Small retailers need protection and policy support in order to compete with organized retail. The Ministry of Housing and Urban Poverty Alleviation has formulated a National Policy for Urban Street Vendors. The policy proposes several positive steps to provide security to street vendors considering it as an initiative towards urban poverty alleviation. However, what is required is a more comprehensive policy, which addresses the needs of small retailers, especially in terms of access to institutional credit and know how to upgrade their businesses.
A regulatory framework for organized retail should also be framed. Since the operations of organized retailers impact upon various sectors of the economy, policy guidelines should be framed involving all the relevant Departments, namely Commerce, Agriculture and Urban Development. Moreover, since regulation of the large format retailers would mainly be in the domain of the states and local bodies, State Governments have to be consulted and involved in the process of framing policy guidelines. A Central legislation or a Model legislation, which can be enacted by the State Governments, may also be considered for this purpose.
In addition, the UPA Government should also abandon the moves to permit FDI in retail trade through the back door, as in the case of the joint venture between Wal-Mart and Bharti whereby the former proposes to operate in the cash-and-carry segment while the latter in the front-end. It is more than obvious that this proposed joint venture is nothing but a subterfuge, to circumvent the existing policy regime, which does not allow FDI in retail. The entry of giant MNCs like the Wal-Mart, TESCO, Carrefour etc, besides accelerating manifolds the already rapid growth of organized retail, would also sabotage any attempt by the Government to regulate the sector in order to protect the interests of the small retailers and farmers. The UPA Government should take a categorical position on this issue. Not allowing MNCs to operate in the retail sector should be the starting point of the national policy on retail.
The issues, which need to be addressed in the regulatory framework for organized retail, have already been discussed above. Some suggestions are made below which seek to address those issues:
A Licensing System for Organized Retail 1. A system of licensing should be introduced for organized retail. Any retail outlet with floor area over an appropriate minimum floor area should require prior license from local authorities (city corporations or municipalities). Corporate entities should not be allowed to operate retail outlets below the specified minimum floor area 2. The authority to grant licenses should be the urban local bodies. A dedicated committee/board/department should be set up by the urban local bodies, with representation from street vendors and small retailer associations, which should be empowered to grant licenses to organized retailers.
3. The system should be devised in a manner so that there is transparency in the process of granting licenses in order to prevent corrupt practices. A process of open bids for granting licenses may be considered.
4. Considering the multiplicity of formats of organized retail, there should be separate sets of regulations for each format, based on floor area. Slabs should be set for the different retail formats, like discount stores, supermarkets, hypermarkets, shopping malls etc based on floor area. 5. Licenses for each format should be given on the basis of a population criterion, i.e. not more than X number of large format retail stores of Y format per Z population. The criteria may vary between states and cities depending upon the nature of the retail sector and needs of consumers. However, a commonality should exist in terms of assessing the employment impact by the local authorities in a scientific as well as democratic manner, before granting license for a large format retail outlet. 6. There should be appropriate caps both on the total number of large format retail outlets that are being granted licenses in particular areas as well as on the maximum floor area for a retail outlet.
7. Retail outlets above a certain floor area should not be allowed to operate within existing commercial zones/areas. In case a license is granted for a large format retailer within an existing commercial area, it should only be on the basis of an agreement to share a substantial proportion of its floor area with small retailers at concessional rent. The allotment of space to small retailers in such cases should be done by the license issuing authority.
8. Giant retail outlets like hypermarkets, which attract large numbers of customers should have adequate parking space and should ideally be located outside city limits. Environmental Impact assessment should also be mandatory for giant retail outlets whose floor area exceeds a specified limit.
9. Penal provisions, including withdrawal of licenses, should be laid down for violation of the terms and conditions of licenses by organized retailers. Government’s Role in Preventing Private Monopolies
1. A single large format retailer should not be allowed to capture a large market share. For this it is important to restrict the number of retail outlets that a single private entity can open in a city, state as well as region. Under no circumstances should a national level monopoly be allowed to develop in the retail sector.
2. There should be guidelines to prevent predatory pricing and below-cost sales by organized retailers. A mechanism should be set up where complaints against predatory pricing can be registered by small retailers. The Competition Commission in India is not suitably equipped to handle such issues. A dedicated mechanism is required for this purpose.
3. In order to prevent the development of big private monopolies in retail trade, it is also important for the Government to ensure its presence in the market. Several Government marketing agencies exist, both at the Central as well as State levels. With a few exceptions, these agencies have been experiencing decay, owing tovarious factors. These marketing agencies should be revived and encouraged togrow and compete with private large format retailers.
4. Consolidation of several Government marketing agencies in order to create a few big public sector retail chains should be seriously considered, which can also invest in developing modern supply chain infrastructure. Panchayati Raj Institutions (PRIs) should be involved in the administration of cold storages and procurement centres.
5. Encouragement should be provided to the existing retail chains in the cooperative sector. New retail cooperatives should also be promoted. Partnerships between existing Government marketing agencies and cooperatives can also be considered, especially in food retail where synergies exist.
6. The State Governments or urban local bodies should levy a cess on the VAT on all goods sold by large format retail outlets (including those in the public sector) in order to create a level playing field between the organized and unorganized retailers. Revenues generated from the cess can be used to create a dedicated fund to provide infrastructure support, financial assistance or cheap credit for unorganized retailers to improve and upgrade their operations.
7. Tax incentives should not be provided, either by the Central or State Governments, for the setting up of procurement/distribution centres or “rural business hubs” by private players. Neither should tax breaks be provided to private players for contract farming. Safeguarding Farmers’ Interests
1. Handing over farmland to food retailers for contract farming should not be permitted. Rules for contract farming should ensure that there is no possibility of farmers being alienated from their land, even if there is a failure in meeting contract commitments.
2. Contract farming should be regulated and monitored by the Government to protect the interests of farmers. Farmers should be encouraged to form groups or cooperatives in order to enter into contracts collectively with corporate rather than entering into individual contracts.
3. The processes of credit provision linked to input supplies and subsequent purchase of the crop, all by one private player, need to be regulated carefully by State authorities and PRIs. Supply of inputs like seeds need to be monitored by the Government. It is also important to ensure that monoculture is avoided.
4. It should be ensured that the farmers are not denied the opportunity of selling their produce over and above the quantity specified in the contract to other agencies at a price higher than what is specified in the contract. Farmers also need to be protected from arbitrary refusal by the contracting parties to buy their produce on grounds of ‘poor quality’. The Government should reserve the right to intervene in such contracts in situations when they are found to be operating to the detriment of farmers’ interests.
5. Large procurement centres created by corporate retailers should compulsorily have separate space for Government agencies. The scope of activities of the Government agencies would depend on the scale of operations. They may range from a single information centre for Government services to various Government agencies supplying inputs, providing extension services, disbursing credit and undertaking procurement. Several State Governments have amended their APMC Acts in accordance with the Model APMC Act framed by the Central Government. That model Act itself needs to be changed incorporating the suggestions made above. State Governments should also be persuaded to do the same.
6. It has to be ensured that a single corporate retailer does not monopolize procurement operations in a district or area. It is therefore absolutely critical that both public procurement agencies and cooperatives are given support, incentives and freedom to compete with the corporate retailers. This would require special initiatives from the State Governments to reinvigorate the Government agencies. The Central Government should also provide adequate funds required for the purpose.
7. Private procurement of food grains by large players who can manipulate the market should be discouraged. The experience of the last two years shows how the free hand given to corporate players has led to shortfalls in public procurement necessitating wheat imports. There is an urgent need to strengthen and expand the public procurement machinery into more areas and provide it with the required flexibility to ensure adequate procurement at remunerative prices. Private procurement of food grains, wherever it takes place, should be closely monitored by the PRIs and the Government.
8. Food retailers or other agribusiness companies should not be allowed to corner and hoard food grains stocks under any circumstances. To prevent cornering of stocks by private players with the associated potential for speculation, there should be rules for public disclosure of stock holding levels. Public agencies should be empowered to purchase food grains from the private holders at pre- specified prices if their stocks exceed a specified level. CONCLUSION
After looking at the above data we have come to a conclusion that presently there is a tend of considerable increase of shopping malls in all the metro cities , small towns and a large section of middle class , upper middle class people are coming for shopping because of the following reasons:
1. Customers convenience for shopping. Items from food to clothing, grocery to electronics are available under one roof.
2. Better environment and improved customer service.
3. compitive price with seasonal discount various gift scheme.
4. Various options to the customer for choosing brand and variety.
5. Ample scope of promoting sales and enhance brand image.
6. Availability of parking space for their car
7. Scope of employment at local area for various segment.
Considering mash rooming of shopping mall, small business man, shop owners and farmers are facing acute financial problem as their business transactions are reducing sharply. Loosing employment by the employee of small shop owners, many of them who were dependent on the small shop for their living are facing the heat. On one hand where the shopping malls are slowly capturing the market due their superior power and size for which they are able to attract more and more customers towards them, on the other hand due to growing trend of shopping mall , especially the farmers and the small shop owners of groceries and other house hold goods are affected as considerable number of customers are shopping these items from shopping malls instead of normal market, and the profit margin is slopping towards the shopping mall To encounter the situation it is required to impose rule or preferably ban by the concerned authority to restrain sales of some particular items (fruit, vegetables and some other glossary product) from shopping mall. This will give the small shop owner and the farmers some protection against the giant shopping malls, so that they can get back to their normal state. BIBLIOGRAPHY
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