Source : ETT / https://economictimes.indiatimes.com/industry/services/retail/retailers-rush-to-open-more-stores-after-2-year-covid-lull/articleshow/90766982

25% jump likely in new store openings even as share of ecomm to total sales doubled every quater since beginning of Covid

Leasing across high streets and malls in India is expected to soar past the pre-Covid levels this year, according to real estate investment firm CBRE, which said the country could see a 25% jump in new store openings in 2022 compared with the previous year. In its report ‘Real Estate Market Outlook 2022 — India’, CBRE South Asia Pvt. Ltd. said retailers are expected to lease over 5.1 million sq ft of space in 2022, coming close to the previous two years’ combined figure of 5.9 million sq ft. Executives of some top retail chains said expansion would be a focus area. “Our store count will increase high double-digit this year, our fastest expansion in at least five years as sales improve every month. A bulk of our expansion strategy will also be focussed on smaller towns,” said Devarajan Iyer, chief executive of departmental store chain Lifestyle International. A sharp drop in Covid-19 cases in the country has helped the pace of economic recovery and encouraged retailers to roll out the store expansion plans they
had put on hold after the pandemic broke out two years ago. This comes even as the contribution of ecommerce to total sales has nearly doubled every quarter from the beginning of the pandemic. “A robust economic recovery has resulted in stronger consumer and market sentiments, leading the retail sector’s growth to quickly return to pre-Covid levels,” said Shibu Philips, business head at Lulu Mall. “Retail leasing throughout the cities has been fuelled by the influx of new businesses and the burgeoning demand from consumers.” March has seen a sharp recovery, with most companies being able to surpass the
pre-Covid levels owing to strong demand driven by the opening up of offices, schools and increased demand due to the wedding season. “The next two quarters provide us the first summer after two straight lockdown summers and we have 13 outlets in the fitout stage,” said Rahul Singh, co-founder of Beer Cafe, which operates over 31 cafes and bars across India. “We plan to sign up another 15 outlets in the coming fiscal, taking our count to over 60 doors. Time lost cannot be regained, but we can surely accelerate to cover it up.” After declining 40% last fiscal because of Covid-19, the revenue of brick and mortar apparel retailers is expected to grow by 20-25 % this fiscal, driven by a strong recovery in demand despite the third wave of the pandemic. Losses last fiscal were funded by raising equity of nearly 22,000 crore, thus limiting the deterioration in capital structure, said Crisil which analysed 35 apparel retailers. Experts said the industry is also seeing an increase in retail rentals as leasing inches back to pre-pandemic levels. “Backed by the growth trend, several deals that were deferred owing to the pandemic uncertainties are now making their way,” said Abhishek Trehan, executive director, Trehan Iris. In the quarter ended December, retailers had said they would step up expansion plans after new stores drove sales in the December quarter.