Buyers take what they give – Newspaper Kommersant No. 60 (7505) dated 04/07/2023
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After a long decline, shopping malls in Moscow and St. Petersburg at the end of March managed to record a 4–6% yoy increase in attendance. If the dynamics continue, then experts do not exclude that the segment will be able to win back the losses caused by the massive closure of its stores by Western brands a year ago. But market participants are not so optimistic and do not expect traffic to recover to the level of 2019.
The Mall Index indicator (reflects the number of visitors per 1,000 sq. m of retail space) in Moscow shopping centers in the week of March 27-April 2 exceeded the figure for the same period last year by 6%, in St. Petersburg – by 4%. Such data is provided by Focus Technologies. A positive trend emerged after a long decline: by the end of March last year, part of the stores of international brands had already closed, the emotional excitement of consumers had cooled down and traffic in shopping centers began to decline, recalls Mikhail Vasiliev, head of research and consulting at Focus Technologies. According to him, the growth of visitors to shopping malls in large cities began to be observed in the week of March 20. But by the end of March, the Mall Index in Moscow and St. Petersburg was down by 5% year-on-year.
After the outbreak of hostilities in Ukraine, about 30 international brands operating in Russia announced their withdrawal from the market and closed, about the same number continue to exist in the “suspension” mode, recalls Olga Antonova, partner of the Commonwealth Partnership. Now she sees a small positive trend in the retail real estate market, linking this to a decrease in consumer social anxiety.
Stockmann CEO Gennady Levkin says traffic in his stores was up 17% yoy last week, with sales up 23%. Baon President Ilya Yaroshenko speaks of a 20% increase in store attendance in Moscow and St. Petersburg compared to the same period last year. He believes that the situation in the fashion segment has stabilized: “Whoever wanted it left, the buyers accepted the situation and make purchases in the remaining stores.” In April, he expects turnover to grow by 7-10% yoy.
Now traffic in shopping malls is generated by stores of departed companies, opened under other names, and some local brands, for example, Lime, Gloria Jeans, Melon Fashion stores, notes Olga Antonova.
She expects that the forthcoming opening under new names of part of the stores of the Spanish network Inditex, which has left the country, can also have a positive impact on attendance. “The first openings should arouse interest among consumers and attract traffic to shopping centers, but consumers will remain or not depends on the diversity of the collection,” says Evgenia Khakberdieva, regional director of the NF Group retail real estate department. In general, there is still a shortage of brands in the market, she said.
Mikhail Vasiliev believes that the increase in attendance at shopping centers relative to the same period last year will continue in April, after which stagnation is possible. The restoration of traffic to the level of the pre-crisis 2019, in his opinion, is not yet discussed. In March, the gap with the value four years ago in Moscow was 27%, in St. Petersburg – 29%.
Olga Antonova believes that a positive result can be considered if the traffic of shopping centers grows by 5-7% year-on-year by the end of this year. Nikoliers partner Anna Nikandrova expects traffic to stabilize at the current level. According to her, the growth in attendance is now largely restrained by general economic factors.
The head of the CORE.XP retail department, Marina Malakhatko, highlights the uncertainty in the economy and the washing out of the middle class, which has always been the core of the audience of any shopping center, from the general list of negative factors. At the same time, Ms. Antonova concludes, the continued rise in prices suggests that the consumer will not be able to afford everything that he could in 2019.
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