COVID-19 impact: Dubai malls open in full, but retailers expect slow buildup of shoppers

Retailers await more guidelines from mall managements on what’s allowed, what’s not

Dubai: Retailers expect to get a clear feel of shopper sentiments this weekend now that malls in Dubai are back to operating at full capacity.

“When they were at 30 per cent capacity and then at 70 per cent after Eid, there was an improvement in mall visitor traffic only on weekends,” said a retail industry source. “And even then, the traffic was generated primarily by the Carrefour and LuLu hypermarkets at malls.

“Single-store retailers haven’t seen much happening – we are hopeful of some improvement now that Dubai has allowed 100 per cent capacity back at malls.

“Over the last three weeks, single-store outlets have mostly been doing 20-50 per cent of what used to be normal… mostly 20 per cent.”

The simultaneous ramping up of office openings in Dubai would also help, especially those malls that see a fair bit of office workers visiting them during weekdays.

Staff requirements

Ashish Panjabi

According to Ashish Panjabi, Chief Operating Officer at Jacky’s Retail, “As most retailers operate with two staff shifts, we initially started by reducing the working hours for each shift (which also coincided with Ramadan). Now as we are open more or less full retail hours, we have deployed both shifts and increased them back to regular working hours.”

Updated guidelines

It was Tuesday evening that Dubai Government sent out a directive allowing all malls and offices in the emirate to return to full operating mode. Mall managements are expected to issue their guidelines to tenants later today.

Children under 12 years can finally return to malls – but they can only visit individual outlets and not hypermarkets. “We were also told that standalone outlets can again start accepting those above 60 years,” the head of a leading apparel brand said.

The removal of these restrictions, especially those about children under 12 years, should in the coming days push mall traffic higher. But retailers realise there’s no point in hoping for an immediate revival of the numbers most Dubai malls have been used to in the past.

The Dubai Future Foundation, a think-tank, notes in its overview of the retail sector, “Post COVID-19, shoppers will return to the malls, but not at the same levels as before, as online shopping habits will have become more routine.

“The current situation is not a precise indicator of the future – but certain changes to consumer shopping habits will change.”

F&B operations at malls will continue to operate with the 2 metre social distancing in place. This category could take the longest to recover.

Some rent relief, please!

Meanwhile, retailers say most mall owners in Dubai in are yet to offer any “useful” rent relief packages. “They have only talked about deferments during the period when malls were shut down as part of Dubai Government’s COVID-19 response measures,” said a retailer.

“Most worryingly, some malls have started to deposit cheques from tenants… even when retailers were told they would be given more time to get their business back to normal. It could set off a deep crisis whereby most of these retailer cheques would bounce.

“Mall owners need to show some generosity – there’s no point in telling us they feel our pain… and then do nothing to lessen it. It’s unfortunate that most mall managements refuse to see us as being equal partners in their enterprise.”

Retailers are hopeful something useful will still emerge from the constant negotiations with malls. “We received feedback from one mall operator this week, which we believe still warrants more discussions as we still don’t find it fully reasonable,” the retailer said.

“However, the “largest mall operator” is yet to give a definitive answer and is expecting us to pay full rent. They’ve started depositing cheques in the last few days (not ours) from various other retailers I’ve spoken to.”

Belated realization

Industry sources say that only permanent closures by leading retail groups of some of their stores at leading malls will convince mall managements that they cannot keep pushing aside rental relief.

 

“COVID-19 has created a situation where there won’t be that many available retailers in the queue to take up the spot vacated by a tenant,” said a source. “Let’s not push ourselves to that extreme.

As Dubai Future Foundation’s report states: “Governments and landlords can provide incentive to shoppers to restore footfall at the malls… once it’s safe to do so.”