Two mall openings face same tough times

Last week, the biggest mall in the city opened to the public. There was much fanfare, lots of people, both shoppers and onlookers that were excitable with jubilant anticipation as the final touches were put in place to a mall that been in and out of the news over the past few years.

The opening of the mall was the start of a new chapter for the company involved, as it is their first in the city and represents their flagship enterprise for what is planned to be a flourishing mall opening campaign in the coming years.

The idea behind the mall is that whilst it will convey opulence like no other retail facility currently on offer in the city, this opulence is (in theory) available to everyone, where "indulgence is no longer the preserve of the very rich". However, what does the opening of such a mall, in context with an economic downturn really mean (I think we allowed to officially call it a recession now)? More importantly, how does such a vast mall plan on attracting the kind of the numbers that all of glossy brochures state it will, when consumer spending and confidence is dropping almost as quickly as the Bank of England inflation rate.

Retailers and almost all other businesses are starting to feel a dramatic effect on their perfunctory routines, as they take account of the nightmarish realisation that it is highly likely that the decreasing spending and rapid loss of credit and liquidity, will continue unabated for some time yet.

So on the topic of retailers, what are the ones in this new mall (or if we are to use the correct retail jargon 'retail destination') to do with rental contracts that were signed a few years ago? They are now committed to making a retail space pay its way, at a time when they are more likely to be thinking about possible store closures, rather than expanding their real estate portfolio. Well, knowing how retailers are they are probably talking about 'weathering the storm' and targeting the 'right customers', but how long the storm will last will be the key to their success.

Comparison

All of the above, of course is in relation to the new shopping mall that opened in London last week - Westfield Shopping Centre; let's be honest, there was hardly going to be another mall opening last week as grand as this, was there? That is of course, unless you live in Dubai.

So as we all know, Dubai Mall opened last week to a little more fanfare, almost certainly a little more opulence and I'm sure just as many people, but of course with the same economic woes still circulating. But if any city has the possibility to lift its head above the crowd and survive in these less certain times, it will be Dubai.

For us then we have the pleasure of watching two of the world's leading malls (and in their respective cities true landmark retail properties) start their life cycles in two very different cities.

Their goals are very similar, but their contents and shoppers will be very different. However, they both face their first true test with the same cloud hanging over them. How to open, take market share from their competitors and survive in a market that to all intents and purposes is more concerned with the possibility of declining numbers of shoppers.

- The writer is Head of Retail Services, GRMC Advisory Services.