{UAH} Hard times for city malls as shoppers shift loyalty

Hard times for city malls as shoppers shift loyalty

Written by Alon Mwesigwa

Created: 03 March 2016

Once the signature structures of Uganda's consumption market, malls in the city centre are beginning to feel the pain of shifting customer loyalty, writes ALON MWESIGWA.

At Garden City parking lot, a boy and a girl, aged about five and eight, dash back and forth. A lady, probably in her mid-thirties, follows at a small distance, with an attendant from Capital Shoppers supermarket helping push a trolley full of goods to the car.

It is a Saturday evening and there are signs of affluence here. These are the kinds of shoppers that every shopping centre would want to attract. Unfortunately, they are becoming thinner by the day, especially at central business district shopping malls. 

Specifically at Garden City, on a Saturday evening, vehicles in the parking lot can easily be counted while at the rooftop, where many children used to play, now only attracts a few.

At Oasis mall, next to Garden City, there are more vehicles in the parking lot but there are signs all is not well – from empty sits at Café Java to shop attendants at the utl store and Africell outlets staring at passers-by. At Nakumatt, the main tenant at Oasis mall, which is supposed to pull crowds, only two tills are working and there is barely a queue to write home. 

"I think we don't receive as many people as in the past," said one attendant at Nakumatt.

The parking lot at malls such as Garden City are getting empty as customers move to the surburbs

This is a new trend, according to real estate agency Knight Frank, where shoppers are shifting loyalty. While malls in the central business district are receiving fewer people, there is a registered increase in both foot and motor vehicle traffic at malls in the suburbs.  Malls such as Acacia in Kamwokya, Ham in Makerere and Village mall in Bugoloobi, are attracting a sizeable number.

A number of shops have closed at Garden City. At the mall's food court section, there are locked-up stalls. Other tenants such as Cineplex, Boda Boda, and Ranchers have since folded.

According to Shakib Nsubuga, the director of real estate online agency Lamudi, three factors are responsible for this trend. He says there are more people living in the outskirts and are more likely to shop from malls nearer to their residence. Another is that there is a lot of traffic jam, which scares away people. Thirdly, some of these malls have lost anchor tenants.

"If you have got cinemas at a mall, I will come to watch a movie and buy juice from a nearby fast food point," he said. 

According to Knight Frank, "the first half of 2015 saw a lot of movement and continuous evolution of the retail sector in Kampala."

"The trend of consumers moving to suburban retail areas has continued and the suburban malls are starting to cement themselves as leisure shopping outings, and changing the landscape of consumer movement and behaviour in and around Kampala." It added that trading in suburban malls has been robust in all leisure categories.

In its property market update for the first half of 2015, Knight Frank notes that malls under its management have seen average growth of 14 per cent in motor vehicle traffic and nine per cent average growth of foot traffic.

"This has had a negative impact on trading densities in the Central Business District environment of Kampala with retailers in the centre starting to consider taking up space in suburban Kampala and are either expanding or relocating their existing business operations," Knight Frank says.

Dr Hannington Byarugaba, the director of City Medicals, and  who owns a clinic at Metropole mall Naalya, says accessibility and proximity to residential areas is more important.

On his visit to Uganda last November, Paul Collier, a professor of economics and public policy at the University of Oxford in the United Kingdom, said Kampala needed good policies to reduce congestion and ensure swift transport that allows people not just to reach work easily, but also to shop.

SUBURBS CRY TOO

It is not rosy in the suburb malls either. According to retailers The Observer spoke to, at Village mall in Bugolobi and Acacia mall, there are few who spend money there.

"Some people come here, take pictures of themselves, buy ice cream and move out," says one retailer at Acacia mall.

At Village mall, one trader of crafts, said: "We target expats but not so many have been coming."

At Ham mall in Makerere, some shops remain unoccupied. This could mean that Uganda's middle-class is not that big to sustain these malls. The ministry of Finance estimates that 37 per cent (about 12 million people) of Uganda's population has achieved middle-class status. Some analysts think this number is exaggerated.

INNOVATE

According to Knight Frank, malls must innovate to remain relevant, as the day-to-day management of shopping malls of 'product alone' is not enough.

"Shoppers are going to shopping malls to be entertained, as part of their shopping experience," said the agency in its 2014 report.

Soon, there will be a demand for more "retailtainment" – which is a combination of retail and entertainment, or a fuller shopping experience where shops are partnered with restaurants and leisure experiences such as bowling and cinemas, it added.

Amanda Ngabirano, an urban planning lecturer at Makerere University, says shopping places should be very attractive and less stressful. But the general urban planning is key, she adds.

Also, management issues must be considered. At Garden City, some retailers accused management of being rude to them and their customers. They said management clamps customers' cars and charges high fines before releasing them, something that has scared away clients.

When we interviewed the manager, Amit Talreje, he said those businesses which closed "had their rent expired and we did not renew [their agreements]".

http://www.observer.ug/business/38-business/42918-hard-times-for-city-malls-as-shoppers-shift-loyalty

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