Dip in sales force retailers to seek rental rebates
A massive hit on sales due to the novel coronavirus scare has pushed numerous leading retail chains including Reliance Retail, Future Group, Tata group firms, Spencer’s Retail, and Landmark Group to seek rental rebates from malls. This comes at a time when multiple states shut down shopping centres and people have stopped venturing out to public places, causing a dip in their revenue by up to 50%. Company honchos are also calibrating amongst themselves on how to handle employee cost and salaries. Another idea that has cropped up pertains to asking employees to adjust their leaves with the period of shutdown.
Yogeshwar Sharma, executive director at Select Citywalk Mall in New Delhi, told reporters “There are different scenarios. If the mall is shut then it’s a different decision. If the movie is closed, but mall is running then it is a different decision. So it is not easy to decide on such situations so early.”
According to the industry, around 60% of all retail rentals in the country are fixed, while the remainder is mostly revenue sharing deals with the tenant. Some contracts, though, are a hybrid of fixed payment plus revenue-sharing.