India is currently witnessing a remarkable boom in retail, primarily driven by the increasing prosperity and disposable incomes of its burgeoning middle class, spurred by impressive economic growth.
This surge has catalyzed the emergence of organized retailing, which significantly transforms shopping dynamics, especially in major urban centers like Delhi, Mumbai, Bangalore, Pune, Chennai, and Hyderabad, among others.
The expansion of swanky malls stands out as a defining feature of organized retailing. These structures have rapidly proliferated in both large and medium-sized cities throughout the nation. In cities such as Delhi, characterized by intense and varying weather conditions, malls have become exceptionally popular.
Even during the peak of summer, when temperatures can climb to a sweltering 42 degrees Celsius, shopping is no longer perceived as a chore. The malls scattered across the city have successfully turned shopping into an enjoyable experience, offering consumers a delightful respite from the heat in a comfortable, air-conditioned environment.
Initially, there were fears that high street retail stores might face an inevitable decline due to the mall phenomenon. However, a recent survey conducted by Jones Lang LaSalle Meghraj, a global real estate consultancy firm, reveals a different narrative: despite the increasing number of malls, high street shops continue to thrive.
The findings suggest that the introduction of new malls within established high streets elevates the overall retail appeal of the entire area. This symbiotic relationship allows both malls and high street shops to benefit from a shared pool of consumers, who flock to locations offering a blend of traditional retail experiences and modern, climate-controlled shopping environments.
The report states, “Though it is early days, the initial evidence does suggest the fact that departmental stores as well as malls and high streets can indeed play to each other’s strengths.”
Complementary to this evidence are anecdotal instances gathered from various cities including Bangalore, Chennai, Hyderabad, Kolkata, and Pune, where feedback from retailers shows mutual benefit derived from both mall and high street presences.
Tanaji Chakraborty, a senior consultant with the firm, notes that high street shops, which previously struggled, have made a robust comeback. This resurgence is particularly noteworthy in fully developed areas where further retail expansion is constrained, leading existing high street establishments to regain their previous allure.
As consumerism continues to rise, these once-struggling high street shopping districts are undergoing revitalization through initiatives from shopkeeper associations or municipal corporations aimed at enhancing customer experiences.
Such efforts contribute to increased retail attractiveness. The report emphasizes the global significance of revitalizing shopping streets, often tied to broader regional regeneration initiatives. In these settings, stakeholders—retailers, property owners, mall developers, development authorities, and local councils—collaborate to devise strategies promoting both economic growth and an enhanced public image.
While this movement remains in its early stages, the report anticipates that as economic interests shift back towards prime inner-city locales—often characterized by prime locations yet marred by neglect—there will be further initiatives aimed at unlocking economic value.
For instance, Connaught Place in Delhi is currently being rejuvenated by the NDMC, and enhancements to Central Park have already been finished by municipal authorities. Similarly, Khan Market has benefited from the shopkeepers' association’s revitalization efforts. Looking forward, the prospect of revitalizing shopping streets looms large across markets, which suggests that the retail propositions of high streets will be considerably enhanced, fostering inclusive retail growth along these prime urban corridors.
This trend is also manifest in the rental rates of high street spaces, which have experienced a significant increase over recent years. The prime rent of Khan Market has surged from approximately Rs 650 per square foot in 2006 to a noteworthy Rs 1,300 per square foot as of the first quarter of 2008.
Notably, the report indicates that the rise in rents across prime shopping streets has been consistently impressive, with increases spanning between 30% and 100% in recent years. This trajectory of rental value growth across other leading cities reveals similar strength.
Consequently, top-tier Indian shopping streets, notably Khan Market, Connaught Place in Delhi, and Linking Road in Mumbai, are progressively entering the realm of some of the world's most expensive retail locations. However, Chakraborty warns that this trend is not necessarily healthy, as it highlights a deficiency in quality retail space and robust infrastructure available in the country.
The evolution of high street shopping typically takes time, paralleling population growth in respective areas. Conversely, malls are designed as standalone establishments, attracting consumers from distant locales.
In new townships, for instance, developers tend to establish malls to cater to the shopping needs of residents while also drawing customers from nearby territories, particularly in initial phases. However, as these developments mature, high street shops are likely to emerge and thrive within the same locality. Ultimately, Chakraborty concludes that the future does not hinge on the success of one over the other; it will be a harmonious coexistence of both mall and high street shopping avenues flourishing as the economy continues to expand in India.