Buyers remembered the stores – Newspaper Kommersant No. 146 (7347) of 08/12/2022

News of the queues lining up in shopping centers in the Russian regions in front of the stores of the Swedish H&M Group, which is gradually opening facilities for the sale of the remaining goods before the final withdrawal from the country, filled the portals of various cities this week.

As local media reported the other day, in Ufa the flow of customers stretched across the entire corridor of the shopping center, and H&M employees had to restrict access to the store. Dozens of people stood in lines at the cash register and in fitting rooms in stores in Yekaterinburg and Saratov. “People are buying mountains of things,” journalists quoted eyewitnesses as saying.

But, as follows from observations in Moscow shopping centers, such an effect is most likely a temporary phenomenon. Yes, the opening of H&M and Cos at the beginning of the month aroused a wave of interest among consumers, the media and Telegram channels recorded pandemonium, and on Avito there were traditional announcements for such cases about the sale of places in queues. But after a few days, the hype noticeably subsided. As follows from the observations of retail real estate market participants in social networks, the number of buyers in H&M stores in Moscow today is comparable to the regular flow before the outbreak of hostilities in Ukraine and the wave of foreign chains leaving the Russian Federation.

Focus Technologies, which measures the attendance of shopping centers, confirms that the opening of outlets did not lead to a surge in traffic. According to them, the Mall Index (the number of visitors per 1,000 sq. m of retail space) in Moscow shopping centers remains 5% below the level of 2021 and 24% below the level of 2019. In part, perhaps, this is due to the policy of the H&M Group itself. The company immediately announced that they intend to sell goods at regular prices, and stocks in Russian stores will last for 50 weeks. Perhaps the Russians themselves have become less responsive to news about a change in the format of work of a particular brand before leaving the country.

For managers and owners of retail real estate, this behavior of buyers is bad news. The closure of stores of major Western brands like H&M and Zara was cited by analysts as one of the main reasons for the decline in attendance at shopping malls. Rental rates and, consequently, the income of property owners, as a rule, depends on traffic. But it turns out that the matter is not only in closed stores. The deterioration of consumer optimism, a cautious attitude to finances, and unwillingness to spend are becoming a reality and the norm. In addition, consumers are increasingly switching to online shopping for clothes and shoes, especially since many brands can now only be found on the Internet.

In such conditions, mall managers will have to come up with new ways to generate additional traffic – or put up with poor attendance numbers.