The 1st cut is the deepest...

To make matters worse, profit margins for this industry for the coming two to three years, according to Namita Chhetri, CEO, ICMR, “will fall from the current 30%-40% to as low as 12%-20% (as per Knowledge@ Wharton).” She further spouts to us, “According to the damning finding of Wharton analysts, because of over crowding of too many players in this business, a killing 70% of the malls will horribly fail the test of time.” Prakhar Sharma, Retail Analyst, CLSA India, ruthlessly vindicates this point to 4Ps B&M, “Yes, real estate costs have increased substantially and even middle level employees charge a high salary. It is difficult for small retailers to survive in this scenario...” Even Krishna Kant, Director (Technical), Era Landmarks, supported this thought process to us, “Seeing the recent spurt in the real estate market, one has to extremely selective in choosing the location of a project.” Attracted by the limelight of the mall culture and befooled by the increasing footfalls, small retailers got entrapped in the mall mania and now, ever increasing real estate prices, maintenance charges and minimal purchases inside the shops have really pushed these retailers to the final wall.

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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