And now, at the time of geopolitical turbulence, the activities of Inditex, LPP, H&M, UNIQLO, those brands that mainly prefer large objects, have been suspended on the Russian market first of all. And you can’t find them in regional shopping centers, with the exception of Sinsay: this brand goes into more compact formats, since it is an inexpensive youth fast fashion. But this is an exception that only emphasizes the rule.
ENTERTAINMENT ON GOING
It should be noted that district shopping centers suffered much more than from the closure of international brand stores from the decline of cinemas (in those malls where they were): during the pandemic, cinemas were closed for a long time and consumers were used to watching movies at home, and now leading foreign film companies , such as Disney, Warner Bros., Sony Pictures, have withdrawn distribution licenses, and cinemas do not have screenings of foreign films.
“The events of recent years, of course, have affected the state of the industry in general and the format of “district workers” in particular. Of the most tangible consequences is the dire condition of cinemas. For most shopping and entertainment centers, cinema has been a very significant anchor, especially in the concept of the last decade, when the entertainment component began to take an increasing place in the life of the shopping complex,” says Sergey Menis, General Director of Adamant Management Company, St. Petersburg.
Problems at cinemas appeared gradually, full halls have long been gaining a minimum number of films, but today they are practically empty all the time. Such large federal networks as Kinomax, Cinema Park, Formula Kino and Mirage Cinema have already announced that some of their facilities will be closed. In total, according to experts, up to 80% of cinemas can be closed, and first of all, just in the district shopping centers.
“In recent years, there has been a tendency to increase the share of the entertainment component and various educational formats in the “district residents”, so that visitors can spend their leisure time within their area, in local shopping centers, and not go to remote large objects. But the pandemic has made its own adjustments, forcing entertainment facilities and cinemas to suffer in the first place,” Elena Solovyova agrees.
Another problem, adds Menis, was the decrease in the purchasing power of visitors associated with rising prices for many assortment positions.
“The assortment of the brand that has returned to us has not changed yet, but prices have increased - for some positions up to 75%,” confirms Alexey Glebov.
“Purchasing power has decreased, people are less inclined to buy non-essential goods and switch to purchases of a lower price category within the same product segment - for example, they take cheaper cosmetics,” Vladimir Pesterov, director of rental relations management at LCM Consulting, says in which manages three shopping centers - two in Moscow and one in Saransk.
However, market players are convinced that the district format, which hosts interesting events for visitors, has more prospects than larger shopping centers - regional and super-regional. “We can completely replace the cinema with popcorn that has lost its relevance with other entertainment, so I think the regional shopping center has more bright prospects than the regionals and, moreover, the super-regionals,” Glebov smiles.