Attendance at shopping centers in Moscow fell to a minimum in four years

The number of visitors to shopping centers in Moscow in early August turned out to be 9-39% less than in the last three years. Sales were unable to raise traffic: amid the closing of competitors, retailers offer smaller discounts,

The attendance of Moscow shopping centers in the first weeks of August 2022 turned out to be lower than for the same period in the last three years, follows from the Rstat Index and Mall Index attendance indices provided by RBC. Rstat Index is calculated by Antivor, Mall Index by Focus Technologies. These data, which reflect attendance per 1 thousand square meters. m of retail space, used by the largest retailers and owners of shopping centers.

According to the Mall Index, in the first half of August, the attendance of shopping centers in Moscow was 11% lower than in 2021, 18% lower than in 2020 and 23% lower than in 2019. Rstat Index has similar data: indicators decreased by 9, 18 and 39%, respectively. Thus, the August sales, as well as the temporary opening of stores of the Swedish group H&M before leaving the market completely, could not support the attendance of shopping centers.

The attendance of shopping centers in RUSSIA as a whole in the first half of August was 9% lower than last year, and 19% lower than in 2019, follows from the Mall Index data. But it turned out to be 3% higher than August 2020, when restrictions related to the covid-19 pandemic were in effect in some regions .

How has attendance changed?

Shopping mall traffic began to dwindle in March, when many foreign brands announced they were suspending operations in Russia in response to the outbreak of hostilities in Ukraine on February 24. In addition to H&M (in addition to the brand of the same name, it owns the chains COS, Monki, Arket, etc.), the stores were closed by the Inditex group (which combines the brands Zara, Massimo Dutti, Oysho, etc.), Uniqlo, IKEA and others.

Since the beginning of the year, shopping centers in Russia have been visited on average by 6% less people than last year, and 20% less than in 2019, follows from the Mall Index. In Moscow, the attendance index was 5% below the level of 2021 and 23% below the level of 2019.

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Compared to the pre-pandemic year 2019, shopping centers have not yet returned an average of 15 to 25% of the audience, depending on the region, says Mikhail Vasiliev, HEAD of research and consulting at Focus Technologies. During the pandemic, many buyers tried online shopping for the first time, and shopping centers increasingly began to come not to spend time and buy something spontaneously, but with a specific purpose. In the second half of 2020 and up to the first two months of 2021, the market gradually recovered, with the audience returning to the malls. “But starting from March 2022, the positive dynamics changed to negative,” he states.

In early August, the level of the Mall Index in Russia as a whole was 2% higher compared to the first months of this summer, and for Moscow it was 1% lower.

Why there are fewer buyers

In the shopping centers of the Crocus Group, in early August, attendance decreased by 14-21% compared to the same period in 2021, compared to 2019, the figures are 20-35% lower, says Emin Agalarov, First Vice President of the group. He attributes the drop in traffic to the shutdown of many anchor tenants and warmer weather. Ilya Yaroshenko, president of the Baon network, also names these factors, he notes a decrease in the number of visitors by 16%, while the average check in the network increased by 50% year-on-year.

According to Yaroshenko, traffic is also affected by a decrease in the income of the population. Consumer behavior can be described as a savings model, people reduce possible spending and reduce the number of visits to shopping centers, Vasilyev agrees.

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In the Street Beat network, traffic over the past week was 17% lower than last year, confirms the trend Lyudmila Semushina, representative of Inventive Retail Group (manages re: Store, Samsung, Lego, Street Beat and others). “The situation is different in different shopping centers. Where there are more empty spaces due to fashion brands, there is a greater drop in traffic, where there is less, the situation is better. Big brands were traffic-generating in many complexes,” she explains.

Retail DIRECTOR of the 12 Storeez chain Aliya Khasyanova notes a decrease in attendance at all Mega shopping centers, where traffic has fallen due to the closure of IKEA. But overall, across 12 Storeez, traffic grew 15% year-on-year in August. There are shopping centers where traffic has not fallen, but has remained at last year's level or increased. RBC sent a request to the Ingka group, which manages Mega networks.

Svetlana Kuzmina, Director of the Retail Real Estate Department at Accent Capital, says that in August the Sokolniki shopping center experienced a 20% increase in traffic due to a change in the concept. In this shopping center, foreign brands that left Russia were not represented.

Ilya Komissarov, head of the marketing department at Lestate (which develops JNS and Sportpoint chains), lists price increases and the redistribution of traffic online, where it became possible to buy some of the goods of closed stores, among the factors reducing the number of customers. For example, Wildberries started selling Inditex brand products. “Our sales on Wildberries and Ozon also doubled or more depending on the brand,” says Komissarov.

Yaroshenko expects a significant recovery in traffic in the last week of August, when families will begin to actively prepare for the school year. The traditional surge in sales in the children's segment is also waiting for Agalarov. In the third week of August, a gradual return of visitors began due to the imminent end of the holiday season, he notes. But the August sales will have a "discreet impact" on the revenues of tenants from other segments, the top manager believes.

Why are seasonal sales down?

Reduced not only traffic, but also the volume of ordered collections, says Yaroshenko. “The goods that are now in stores were ordered during a period of complete uncertainty in February-March,” he explains. According to him, no one goes into “deep discounts” now: “In the past, during sales, many retailers focused on large Western brands such as H&M and Inditex. Now we need to think about marginality first of all.” Baon is running a "very moderate sale" this year with fewer items than before. According to Yaroshenko, other networks do the same.

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This year, sales at retailers “are not so extensive,” Khasyanova confirms. She attributes this to the fact that the stores that continued to work had not many goods left by the end of the summer, the collections were “practically bought out”.

“The number and depth of discounts has decreased. Many retailers have revised loyalty programs in the direction of reducing discounts,” agrees Komissarov. This happened due to the complexity of logistics. “Increasing the speed of sales, you can be left without a product. Since delivery times have increased by 1.5-2 times, you can be left with empty shelves and money for which there is nothing to buy,” he said.

How the sale at H&M affected the flow of visitors

In most of the facilities where H&M stores temporarily opened, traffic increased compared to March-July, when the chain's outlets were closed, says Nadezhda Tsvetkova, head of CORE.XP retail space leasing. “After that, other fashion brands that did not stop their activities felt a drop in turnover,” she adds. Compared to 2021, traffic in shopping centers where H&M stores opened in Moscow remained at about the same level, while in the regions it increased.

In regional shopping centers, overall traffic declined less than in Moscow and St. Petersburg, Anna Nikandrova, partner at Nikoliers, notes. “In the regions, a shopping center is often an uncontested way for shopping and spending leisure time. This year, in some regions, we are seeing an increase in attendance against the backdrop of last year’s decline due to covid restrictions,” says Nikandrova.

The press service of the H&M group declined to comment.