The opening of Galleria Arad, Oradea Shopping City, Maritimo Constanta and ERA Mall Oradea will soon make the battle for the consumers’ money even fiercer in these cities. Arad, Oradea and Constanta already have shopping centers that have entailed investments of tens of million euros.
New projects are due to be opened in Craiova, Botosani or Bucharest’s Chitila area, but competition in these areas is not as tight, so that developers and retailers might be more relaxed.
In the other cities, though, the new players on the market will use every resource available to benefit from the novelty element and secure consumers’ loyalty from the first days.
Georgiana Andrei, head of retail with Bucharest’s office of Colliers International, says that after location, an important element in the competition between two malls is related to who came first. Outside Bucharest, though, the potential market may be too small for mall owners to make too much money in the first years.
“They will each have to steal a small bite of a ‘bread roll’. On short term, in some cases I do not believe we can speak of winners among mall owners,” Andrei says.
She adds that the battle of shopping centers will benefit customers and retailers, which get better rents. As a result, malls will have to focus more on promotion to the final consumer, whose loyalty they need to secure.
The western cities that will have new malls this autumn, Arad and Oradea, had lower-than-expected sales in the existing shopping centers, too, consultants say, so that the bread roll can be said to be quite small. Nevertheless, the opening of the new malls may halt to a greater extent the migration of consumers to Timisoara, Budapest or Vienna.
In Oradea, where Lotus Center project has been operational for nine years, Oradea Shopping Center and ERA Mall projects will also be opened. “At this moment, with the official announcement on the opening of the third project, Oradea Shopping City, competition will become extremely fierce,” says Daniel Nistor, retail account manager with CB Richard Ellis.
Things are much more balanced between projects Atrium and Galleria in Arad. Until now, though, with two projects, Arad has not generated the sales owners and retailers had hoped for. “As regards the concept and the critical mass, the projects are similar and correct. As regards the retailers’ mix, the competition is very tight and the customers’ reaction is difficult to predict,” says Oana Iliescu, managing director at DTZ Echinox.
Constanta is a city that consultants say can integrate project Maritimo as well, considering the existing projects, City Park and TOM, have results above the average of shopping centers of other cities. “In Constanta, Maritimo will attract through its size and implicitly through the generous brand offer,” says Roxana Stanciulescu, head of retail with Jones Lang LaSalle.
What is ultimately of uttermost importance? It is the funds the inhabitants of these cities have available for shopping and their appetite to spend it during a period of still sluggish global economic growth.
What will happen in case of frail sales? Either banks will be lenient when it comes to the payment of installments as a mall’s bankruptcy is not the happiest decision for anyone, or shareholders will take out money from other pockets to keep them afloat.
Instead, customers should be the winners, as they will have more options and amid competition, lower prices.
(English version by Catalina Apostoiu)