Second wave hit retail hard

It took away whatever business had come back between October and March

Shopping hubs in Bengaluru had recovered considerably by March, but the second wave has again set them back.

Metrolife looked at how three major business areas ---Jayanagar, Indiranagar and Brigade Road---are faring in the wake of the second wave.

INDIRANAGAR

Restaurants shut

Indiranagar, with about 300 restaurants, has seen about 25 shutting down for good, according to business insiders.

In February 2020, Amit Ahuja, managing director of AA Hospitality, launched Lucky Chan on 12th Main Indiranagar after 18 months of preparation and had to suspend operations because of the first wave for more than three months. He also owns Misu. “We reopened in June, but business was moderate,” he says. He adds that while most landlords haven’t reduced rent, he has been fortunate to get a reduction.

The Pizza Bakery in Indiranagar has managed to survive only because of its delivery section. “The income just about covers the rent and salaries,” says Nikhil Gupta, owner. The restaurant had returned to 75 per cent business by March, when the second wave hit. “Our delivery picked up pace after mid-May when people started ordering online,” says Gupta.

Monthly rents in Indiranagar are between Rs 100 and Rs 250 per sq ft. “During the first lockdown, I got a 15 to 20 per cent discount on rent. But after the second wave hit, we are still negotiating on reducing the rent,” says Gupta.

The House of Commons and 1131 Bar and Kitchen on Indiranagar 12th Main have been running on moderate business during the pandemic. Delivery doesn’t work for them. “Our head chefs and cooks have all returned to their hometowns,” says Biswabhusan Lenka, general manager of the two restaurants.

JAYANAGAR

No wedding season

The Jayanagar Traders Association has about 300 members. Prakash Mandoth, founder and president of the association, says Jayanagar, with its jewellery and garment shops, is a favourite for wedding shopping, but with restrictions on celebrations, business was hit badly.

Shops that were around for more than 15 years haven’t closed down, but some newer establishments haven’t survived the pandemic, he says.

“They have closed down for good in recent months,” he says. Franchises for brands such as Red Tape, Indian Terrain, Ethnix by Raymond, Senco Gold and Diamonds, City Style, Sreeleathers, Bombay Dyeing and Oxemberg, are among them. In some cases the rents came down, says Prakash, president of the Federation of Karnataka Traders Association. Asma and Gupta’s Textile Annexe, retailers of men’s and women’s ethnic wear on Jayanagar 11th Main, say business had returned to 100 per cent by March.

Nischal Gupta, owner, says, “We were gearing up for the wedding season, and Ugadi and Ramzan. However, due to the second lockdown, we are in a huge mess, as we have procured a lot of goods,” he told Metrolife. Almost 30 per cent of the yearly revenue of garment shops comes from the April-May season. Many landlords waived rents last year during the lockdown, he explains. Linkers, a soft furnishing company, has been sending material to customers’ homes. “This is how we have been surviving,” Rajeev Soni, owner, says. People are quite scared to step out now and business has hit a new low, he adds.

BRIGADE ROAD

High rent problem

Retailers on Brigade Road say recovery from the second wave might take at least a year. “We had just begun to recover from the first wave. While lockdowns and curbs definitely helped keep the city safe, they also took a lot away from us businessmen,” says Naresh Nagpal, general secretary, Fifth Avenue Owners Association. Business between December 2020 to February 2021 was pretty good and gave traders hope that they were getting back on track, says A M Siddique, textile and electronics dealer.

The Smart City project added to the loss of business as workers dug up Brigade Road, says Suhail Yusuff, secretary, Brigade Shop and Establishments Association. “The barricaded streets only made things harder for shop owners. Last year about 25 stores closed shop for good, so far this year four to five more stores have joined them,” he adds. The footpath work is expected to be done by June 14. Landlords on Brigade Road had refused to budge on the rents last year, forcing about 25 businesses to shut shop.

In the last three months, some have agreed to reduce rents by about 20 per cent, says Nagpal.

Ready reckoner

Indiranagar

No of businesses: 300

Closed for good:25

Earlier rent: Rs 150 and Rs 250 per sq ft

Now: Reduced by 10 to 15%

Brigade Road

No of businesses: 125

Closed for good: 30

Earlier rent: Rs 250 to Rs 400 per sq ft

Rent now: Rs 200 to Rs 350 per sq ft

Jayanagar

Rent: Rs 100 to Rs 500 per sq ft (ground floor)

Now: Landlords waived rents for some months. Some shops pay 10 per cent less.

Restaurants changing strategies

Manu Chandra, Bengaluru chapter Head, National Restaurant Association of India (NRAI), says some restaurants have shut down and others are reworking their strategies. “When restaurants open, they must be allowed to carry on with outdoor seating which is, in fact, a much safer option than staying indoors. But in Indiranagar, for instance, because of stiff resistance from the residents’ association, outdoor seating has not been allowed,” he says. NRAI wrote to the government requesting easy loans and a waiver of the excise licence renewal fee.

‘Dynamics of biz has changed’

Suresh Hari, chairman of CREDAI, Bengaluru, says commercial rents have come down by 10 to 15 per cent and residential rents by 25 per cent. “There is no uniformity in rental reduction. There have been cases where the landlords are giving tenants more time,” he told Metrolife. The pandemic has changed the dynamics of doing business, he observes. “The demand curve is changing and shopping has mostly gone online. Shoppers may not visit physical stores till a majority of the population is vaccinated,” he says.

Long haul ahead

Business owners believe things are going to be pretty much the same for the next six months. Big brand franchises don’t know how long it will take them to get back to where they were, says Raju Chandran, store manager, Arrow, Brigade Road. Competition from e-commerce websites has made things harder. “If we want to survive, we need to dip into digital marketing and home delivery,” adds Siddique, who runs two businesses on the road.