2024: A space odyssey; hypermarts cut shelf space as Q-comm occupies mindspace

Hypermarkets at malls have started giving up space with some of them even shutting stores as sales have declined due to the penetration of quick commerce apps such as BlinkIt and Zepto, three mall operators said.

Landmark Group’s Spar India has reduced store sizes and closed some outlets in Delhi NCR and Bengaluru after sales fell, said one of them. Similar is the case with Reliance Smart Bazaar, said another operator, with sales down by about a third. Deerika Hypermart, present across Delhi NCR, has closed three stores. Reliance, Spar and Deerika did not respond to queries. “Impulsive sales at hypermarkets are down, people buy only required items,” said Muhammad Ali, CEO, retail, Prestige Group

Trend Different in Tier-2 Cities


“By reducing space, companies save on rent while sales remain the same,” he said. Prestige Group operates Forum malls in south India.

A retail industry expert said buyers can’t stand the hassle anymore.

“Who will brave traffic, park cars and stand in queues for billing? Consumers’ shopping behaviour is changing rapidly,” the person said.

Hypermarkets were conceived as anchor stores in malls and expected to be the big draw that would get the crowds in but that trend has shifted. Many companies have given up 15- 20% of the space they’d leased to save on rent.

The new pull factor is said to be dining.

“Restaurants are driving footfalls for malls and they have become the new anchors,” said Harsh V Bansal, cofounder of the Unity group, which operates over half a dozen malls in Delhi and Punjab. “With so many delivery apps offering instant delivery, buyers are hesitant to come to the mall for grocery shopping.”

One mall operator said that a hypermarket that used to ring up Rs 6 crore sales every month is now down to Rs 3-4 crore. Another slashed the size of its hypermarket to 40,000 sq ft from 60,000 sq ft.

“Deerika hypermarket has closed three stores temporarily in Delhi, Ghaziabad and Faridabad,” said Abhishek Bansal, MD, Pacific Malls, which operates multiple malls in NCR. “Overall, the category has started taking less space than it used to take earlier.”

To be sure, UAE's Lulu Group, which also runs a chain of hypermarkets, is expanding because it has positioned its outlets as family destinations in Kerala and Uttar Pradesh. It’s considering smallscale malls with a hypermarket focus in cities such as Prayagraj, Gorakhpur, Kanpur and Banaras.

Experts said that in tier 2 cities, hypermarkets are still considered destinations, but the trend has reversed in metro cities.

Same-store sales growth of grocery leader Dmart was also impacted by lower-than-expected festive season sales in non-FMCG (fastmoving consumer goods) besides steep inflation within FMCG in agri-staples.

According to Boston Consulting Group, a growth slowdown was reflected across sectors in recent quarters but grocery was the most impacted with sales slowing to 16% in the March quarter from 23% in the year-earlier period.