Consumer confidence in July turned negative for the first time since December 2018, according to a survey by RBI
Sluggish consumer sentiment is pushing retailers to renegotiate rentals, reports The Economic Times.
Fabindia is said to have written to landlords to renegotiate rentals, seeking their 'cooperation' to make the business more viable.
Retailers said the situation has become worse since July and massive discounts have not helped improve the situation, the report said.
Consumer confidence in July turned negative in July for the first time since December 2018, according to a survey by the Reserve Bank of India (RBI). Also read: Consumer confidence tumbles in July over jobs, eco situation: RBI survey
Moneycontrol could not independently verify the report.
Footfalls at stores have fallen by as much as 20 percent, a senior executive at a retailer told the publication.
“A-category malls are still doing well but for other normal malls they have seen a 3-7 percent drop in walk-ins,” said Vasanth Kumar, Managing Director of the Lifestyle department store chain. He said Lifestyle will reduce the space or release the area in the normal malls where the business is not doing well.
“We are working on a strategy. First thing, we are postponing the rent increments that are coming… We have discussed it at our last board meeting and there is no choice,” a source at another retailer told the paper.
The source added that same store sales have fallen to five percent from 8-9 percent a year ago.
The business development head of a large listed retail chain told the paper that if developers refuse to lower rent, then shutting stores will be the only option.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.
