On the first weekend after the terrorist attack at Crocus City Hall, attendance at Moscow shopping centers decreased by 30–35%

In the first weekend after the terrorist attack at Crocus City Hall, attendance at shopping centers in Moscow decreased by 30–35%, in Russia as a whole – by 15–20%. Market participants expect traffic to recover within a month, promising additional security measures. Crocus itself is one of the largest shopping and entertainment facilities in the country; the family of its owner Aras Agalarov promises to restore “what was destroyed with dirty hands.” The cost of the work may exceed 11 billion rubles, and the consequences of the incident for Crocus Group facilities may be more severe than for the market as a whole, experts believe.

Attendance at Moscow shopping centers on March 23 and 24 could have decreased by 30–35%, Focus Technologies told Kommersant. For example, on Saturday, Moscow traffic decreased by 33% week-on-week and by 34% year-on-year (data for Sunday was not available at the time of writing). In Russia as a whole, the fall could be 15–20%, analysts say. Many Russians have postponed visits to shopping centers not only for safety reasons, but also as a sign of sympathy for the families of the dead and injured, notes Mikhail Vasiliev, head of research and consulting at Focus Technologies.

Vice President of the Union of Shopping Centers Pavel Lyulin believes that on average traffic in Moscow shopping centers over the weekend decreased by 15–20%. Managing partner of Vanchugov and Partners, Alexey Vanchugov, admits that in some properties the “emotional decrease in traffic” over the next week or two could be 50–70%:

“On the day of the terrorist attack, many facilities closed an hour earlier; entertainment areas, cinemas, and fitness centers were closed on weekends.”

Restaurateurs also report a sharp drop in traffic. At the Black Star Burger chain, the number of visitors dropped by half on Saturday, said company managing partner Yuri Levitas. The same dynamics are observed in Rosinter Restaurants (IL Patio, Planet Sushi chains, etc.). In some establishments of the Rakovaya gastrobar chain, according to its co-owner Evgeniy Nichipuruk, cancellation of reservations for March 23–24 reached 100%. In the Yakitoria chain it was 15–25%. StrEAT founder Maxim Popov noticed a 30% drop in traffic on Saturday and expects “similar dynamics” on Sunday.

At the Selfie restaurant, traffic on Friday-Saturday decreased by 20%, at She on Bolshaya Nikitskaya Street and Tekhnikum on Dmitrovka – by 10-13%. In Eat Market food halls in the center of Moscow, revenue on Saturday decreased by 30–40%, in residential areas by 10%, says Vladislav Zemsky, founder of the Zemskiy Group. He clarified that the drop was compensated for by delivery, which increased by 15–20%. According to him, many establishments closed at 21:00 on weekends. “People have a negative psychological state and fears about being in public places,” notes Evgeniy Nichipuruk.

Strengthening security

The restoration of traffic to retail facilities, according to Pavel Lyulin’s forecasts, will take about a month. Alexey Vanchugov expects a return to the usual values ​​“in the absence of new major shocks,” although he admits that “there is nothing to compare the situation with.” There have not been such major incidents for a long time; a parallel can only be drawn with the pandemic period, which involved a long-term restriction of activities. Mr. Vasiliev calls strengthening security measures one of the factors for restoring traffic.

Mr. Lyulin claims that Moscow shopping centers are now massively strengthening security and organizing additional checks at the entrance. This, he said, will increase security costs by 20-30%. The organization of armed guards from the Russian Guard requires the conclusion of additional contracts, the cost of which is 300–400 thousand rubles. per month, he adds. But Mr. Lyulin doubts that shopping centers will be able to use enhanced security in the long term: “Even an ordinary security guard is difficult to find, unemployment is at a minimum, many are involved in special operations.”

Alexey Vanchugov believes that in general we can talk about “increasing the class of security guards.”

He emphasizes that private security companies can also create armed rapid response teams and squads with dog handlers. Experts are talking about the possibility of purchasing additional monitors and installing cameras that respond to sounds, movements, and facial expressions. The implementation of these measures, according to Mr. Vanchugov, will take several weeks, leading to an increase in demand for the services of specialized companies. The total costs of shopping centers on security, which currently amount to up to 10% of expenses, could rise sharply, he believes.

Catering establishments have also strengthened security measures. Maxim Popov says that the food mall has increased the number of posts and security guards who “regularly inspect the territory.” According to him, “such measures will continue for some time, depending on the level of danger.”

But small establishments are unlikely to have the necessary resources. “It is unrealistic to place security guards with weapons,” Yuri Levitas is sure. Vladislav Zemsky says that his establishments serve 30 thousand people daily and “it is impossible to strengthen security at all facilities at the moment.”

What will happen to Crocus?

Crocus City Hall, a victim of the terrorist attack, is an object of the Crocus Group of Aras and Emin Agalarov. The concert hall was opened in 2009, its capacity reaches 9.5 thousand seats. The venue hosted performances by Russian and foreign performers, including Elton John, Jennifer Lopez, and Sting.

Crocus Group posted a message on its website on March 24, saying: “What was destroyed by their dirty hands will be restored.” However, Aras Agalarov himself clarified to Kommersant that “time is needed to assess the scale of the damage and the possibility of reconstruction.” Parts of the building, according to the businessman, survived the fire, but it is necessary to “analyze different scenarios.” Jobs for employees will be preserved, he assured.

Director of Consulting and Development at Key Capital Evelina Ishmetova considers the restoration of Crocus City Hall expedient, estimating the costs at 9.5–11.4 billion rubles.

Kommersant’s interlocutors at the market believe that the object was insured. If the risk of terrorism is included, the owner can count on a payment that will be determined taking into account the amount of damage, notes Alexander Tsyganov, a professor at the Financial University under the Government of the Russian Federation. The complex itself, in his opinion, is estimated at no less than 10–12 billion rubles. Also, according to the expert, we can talk about payments during a break in work, which will be determined by the time of repair. Another Kommersant source in the insurance market does not rule out that the situation “could have consequences for the industry as a whole.” Reinsurance of objects will become more expensive for insurers, which will lead to an increase in the cost of their product for clients.

In addition to Crocus City Hall, the portfolio of commercial properties of the Agalarov family includes three shopping centers under the Vegas brands (total area 996.3 thousand sq. m), Crocus City Mall (62 thousand sq. m), and the hypermarket chain “Your House” “and a number of others. The complex in Krasnogorsk is the largest. There is not only a concert hall where the terrorist attack took place, but also shopping areas, as well as the Crocus Expo exhibition center. During the attack, only the concert hall building was damaged. But all Crocus City facilities were closed on the weekend. The company does not say when they will open, noting only that the extent of the damage is currently being assessed. Alexey Vanchugov admits that the consequences of the terrorist attack for all objects under the Crocus Group brands “may be more significant than for the market as a whole.”

Alexandra Mertsalova, Daria Andrianova, Yulia Poslavskaya