Forget the high street vs. mall debate! In India, savvy retailers are playing both sides. From bustling lanes to gleaming complexes, they’re spreading their wings across formats to catch every kind of shopper. Why? Because today’s consumers want choice, not limits. It’s like they’re saying, “We’ll be where you are, dear shopper!” Each avenue, be it the vibrant high street or the sophisticated mall, brings its own unique advantages and retailers are cleverly harnessing the strengths of both to maximise their reach and meet the diverse needs of today’s shoppers.
Factors influencing retailers to choose High Streets
High streets — they’ve seen it all and they’re still standing strong! In India’s top eight markets (Tier-1 cities) – Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, National Capital Region (NCR) and Pune – there are 4,875 retail businesses spanning 13.2 million square feet in these shopping avenues, also known as high streets, according to a Knight Frank analysis. Additionally, the research projects that potential high street consumption (total spending or sales generated by retail businesses) in FY ’24 will approach US $ 2 billion. The potential consumption in FY ’24 for shopping malls in terms of per square feet per annum is US $ 1,273 while for high streets, it’s estimated at US $ 4,099.
High streets cater to a more local and budget-conscious audience, while malls attract urban shoppers seeking international brands and modern experiences.
Retailers across various sectors are opting to launch larger physical stores and expand their existing ones, responding to a growing consumer demand for enhanced in-store experiences. According to real estate services firm Anarock, the proportion of stores smaller than 2,000 square feet decreased to 52 per cent in the first half of 2023-24, down from 61 per cent a year earlier.
During this period, there was a noticeable increase in the share of stores sized between 2,000 to 5,000 square feet, rising from 19 per cent to 21 per cent. Similarly, stores sized between 5,000 to 10,000 square feet saw an uptick, growing from 9 per cent to 11 per cent. Additionally, stores ranging between 10,000 to 15,000 square feet also experienced growth, increasing from 9 per cent to 13 per cent.
Retailers with a renewed focus on Tier-2 and Tier-3 cities are also recognising high streets as significant opportunities. India’s largest retailer Reliance Retail‘s goal is to inaugurate 100 Fashion World by Trends stores this year, with a strategic focus on towns currently lacking Trends outlets. These new stores will cater primarily to towns with populations under one lakh, featuring a diverse array of apparel, including ethnicwear, kidswear, men’s and women’s clothing sourced from national value brands and Reliance-owned labels.
International brands flock to malls
There’s a noticeable preference amongst international brands for malls over high streets compared to their Indian counterparts. “Most international retailers, especially in apparel, require multi-floor or contiguous retail spaces for their stores to display merchandise or offer an experiential feast to customers, which is hard to find in high streets,” stated Knight Frank report.
Of the total retailer presence across the top eight markets, only 14 per cent retailers of international origin are situated in high streets. In contrast, 31 per cent of retailers of international origin have a footprint in shopping malls.
High streets in smaller states and cities are becoming hubs for well-known national brands. The region is now attracting upscale apparel brands aiming to meet the rising demand in states like Assam, Tripura, Manipur and Mizoram. The lingering question is: when will these cities embrace the mall culture?
Meanwhile, companies like Trent Retail, Shoppers Stop, Aditya Birla Fashion Retail, Arvind Fashions, Raymond and V-Mart are also significantly expanding their presence outside of malls.
Akhil Jain, Executive Director of Madame, a brand with a network of over 150+ exclusive stores across India, highlighted that high streets offer Indian brands an exceptional chance to engage with the local community. “Our stores are located pan-India. High streets provide excellent visibility and an opportunity to connect with the local community. They exude a sense of exclusivity, attracting customers who value an exclusive shopping environment. Malls, on the other hand, attract a specific demographic seeking a curated shopping experience. 55 per cent of our stores are high-street, 45 per cent are in malls.”
Many retailers who spoke to us highlighted that high streets are often seen as more accessible and approachable, making them a good fit for casual and youth-oriented brands. Also, high streets may be a good starting point for new or smaller brands looking to establish a local presence.
Shoppers opt for high street for its convenience of quick entry and exit, contrasting with the time constraints of a shopping mall. Parking complexities in malls can be time-consuming. The layout, especially if the store is not on the ground or first floor, may divert attention. Additionally, high street stores offer personalised attention and potential discounts, encouraging repeat visits from customers.
“Customer service and ensuring every customer leaves happy after a unique store experience is a priority. At our stores, garments can be customised for every customer. This is possible in single-owned stores and it’s a little more personal than shopping at a mall. We’ve done well with our single-owned stores, just given what our brand represents,” stated Lakmé Fashion Week Designer, Kaveri Lalchand, Founder of Kaveri, a luxury linen brand. The brand has five stores across India and is looking to expand its footprints.
“Our in-store customer experience journey is coherent across formats – high street or mall. In fact, our store conversions are higher in high streets in comparison to malls,” claimed Rahul Bhalla, Co-founder and CEO, Latin Quarters, a lifestyle brand known for its dresses in addition to other apparel, bags and jewellery. The brand currently operates 21 Exclusive Brand Outlets (EBOs) across various cities.
|“Our in-store customer experience journey is coherent across formats- high street or mall. Infact, our store conversions are higher in high streets in comparison to malls. Target audience demographics, purchasing power, footfall play crucial roles in our selection process for opening any store.” Rahul Bhalla Co-founder and CEO, Latin Quarters
Retailers also tapping into Malls
Indian retailers aren’t only concentrating on high streets, but tapping on the growing mall culture across country. Malls provide not just shopping avenues, but rather a mix of entertainment and culinary outings, including the movie theatre experience.
Last year, the new supply of retail space in shopping malls surged by 72 per cent, reaching 59.48 lakh square feet across eight major cities, addressing the increasing demand from retailers, as reported by Cushman & Wakefield. In 2023, a total of 11 shopping malls were launched, covering 59,48,395 square feet of space across the top eight cities. In the preceding year, nine malls debuted across these markets, amassing a total area of 34,49,222 square feet. Hyderabad saw the completion of three shopping malls, while Pune and Chennai each had two new establishments. Additionally, one shopping mall each were inaugurated in the Mumbai Metropolitan Region, Delhi-NCR, Bengaluru and Ahmedabad. Notably, no new mall emerged in Kolkata.
India’s best high streets and their unabated growth
Selected high streets like Brigade Road and Indiranagar in Bengaluru, Colaba Causeway in Mumbai and Connaught Place and Khan Market in Delhi-NCR have successfully lured top-tier Indian and international brands, benefiting from substantial retailer expansion and an early embrace of modern retail concepts. Be it Linking Road, Colaba Causeway and Hill Road in Mumbai; Lajpat Nagar, Connaught Place or Khan Market in Delhi; Park Street and Camac Street in Kolkata; or MG Road and Koregaon Park in Pune — high streets continue to experience a high footfall, despite the lack of shopper-friendly infrastructure like access to clean washrooms or air- conditioning and parking.
Lease rates along well-known high streets, which have seen an increase in the past 4-6 quarters, are still under upward pressure in most markets. The leasing activity in the retail space across the top eight cities was predominantly driven by high streets, highlighting the limited availability of space in Grade A malls. For the uninitiated, malls with over 5 lakh square feet GLA (gross leasable area) are classified as Grade A, while those between 1-5 lakh square feet are categorised as Grade B and Grade C are those below 1 lakh square feet. Consequently, popular high streets like Khan Market, Linking Road, Galleria Market, Banjara Hills, Adyar and several others witnessed rental prices approaching or surpassing pre-Covid levels earlier in the year 2023, according to the report.
Saurabh Shatdal, Managing Director, Capital Markets and Head of Retail at India, Cushman & Wakefield said, “With a surge in supply of new malls in Q4, the total mall supply across top eight cities in 2023 surpassed the highs of 2019 by a nearly million square feet. This reflects the strong interest from retailers in entering or expanding into the Indian market, fuelled by evolving consumer preferences, shifting consumption patterns and a supportive business environment.” He further predicted the continuation of this positive trend in 2024.
Embracing the mall vibe, many established Indian retailers are making a beeline to share the spotlight with international brands. According to experts, those looking to spread their wings should set their sights on mall spaces for increased visibility and to craft a compelling aura around their brands. On the flip side, experts advise retailers taking baby steps to stick to high streets – the sales there are stellar compared to malls.
|“It’s all about striking the right balance—high streets as cash cows for steady returns and malls as bulldogs for building that unbeatable brand image. Take our upcoming Adani Lucknow Airport store. Sure, the rent burns, but the brand visibility? Priceless.” Lakhbir Singh Brand Head of Killer Jeans
Sharing insights, Lakhbir Singh, Brand Head of Killer Jeans, emphasised that establishing stores in malls goes beyond mere profit considerations. Presently, Killer Jeans boasts a network of approximately 350 retail stores spanning across India.
He stated, “Shopping malls attract significant foot traffic around the year, providing retailers an opportunity to make a lasting impression on shoppers. Generating the same level of foot traffic on high streets in extreme temperatures, such as 45°C in places like Sri Ganganagar or Jaipur, can be challenging. You need to rub shoulders with the international brands so that shoppers perceive your brand in a positive light. While I agree that mall profits might not match what high streets offer, it’s worth considering the other benefits.”
Emergence of Factory Outlet Malls
Sensing the surge in discount-driven shopping fuelled by e-commerce rivals, Indian retail developers are embracing the global trend of factory outlet malls. As per reports, Bengaluru, Guwahati, Coimbatore and Punjab are also planning similar retail spaces, offering year-round deals from premium brands.
Last year marked the inauguration of the Pacific Premium Outlets Mall in Jasola, New Delhi, exclusively featuring discounted stores of premium brands. It houses nearly 48 global and local brands, such as Madame, Indifusion, Deerika HyperMart, Tommy Hilfiger, Calvin Klein, Levi’s, Skechers and American Eagle, amongst others, offering their merchandise at discounted prices. Abhishek Bansal, Executive Director of Pacific Group, highlighted that while India traditionally had small catchments with discounted stores, dedicated and organised outlets were absent from the country’s retail scene.
He added, “It’s all about striking the right balance—high streets as cash cows for steady returns and malls as bulldogs for building that unbeatable brand image. Take our upcoming Adani Lucknow Airport store. Sure, the rent burns, but the brand visibility? Priceless. Think of that gleaming billboard flashing your name to every jet-setter – an instant prestige boost you can’t quantify.”
Supporting the thought, Jaiwant Singh Dhingra, Chief Marketing and Business Development Officer at Numero Uno Clothing Ltd, stressed, “We have over 300 stores spread across the country with most of them located in Northern India. There is no specific preference while choosing a location. Each location and/or format has its own potential and we base our decisions on that. However, cost considerations are a major factor.”
He added, “The first thing that comes to mind is the rent after which cost of operations comes. The costs vis-a-vis the expected revenue have to be in order. Going for a location where short-term benefits like visibility and branding are reaped but long-term profits aren’t made doesn’t usually make sense.”
Over the past few years, retailers have established a robust omnichannel platform to reach customers and deliver a seamless shopping experience. Expert argue malls allow for a better integration of physical and digital experience to provide an interactive and all-inclusive in-store experience.
Experts say India’s retail landscape is a two-step waltz, embracing both high streets’ cash flow and malls’ brand magic. The future belongs to those who master both rhythms.