Pandemic, inflation and election year leave the scenario not very encouraging for malls

While part of the shopkeepers plan to migrate some stores from the malls to the streets, some intend to remain in the shopping centers. The Biscoitê chain, for example, of artisanal cookies, has 30 of its 32 stores in malls, but recognizes the obstacles of the operation.

“We had a huge difficulty in negotiating the adjustment by the IGP-M with the malls, everything had to be case by case”, says Raul Matos, president of Biscoitê. According to him, a third of the stores pay the full adjustment by the IGP-M. Others have a discount. “I still think the mall is better than the street, due to the guarantee of safety and flow of consumers”, says Matos.

Even so, the chain has just opened its first street store in Campinas (SP) and wants to grow in the store-in-store model (“store in store”), where it already has a point: Biscoitê inside Salinas, in Oscar Freire Street, in São Paulo.

“The shopkeeper’s contract with the malls used to be by adhesion: the shopkeeper belonged to that venture and did not leave there so soon”, says the specialist retail consultant Eugênio Foganholo. “There was also a culture of owner, when negotiating directly with the person in charge. But after the big administrators [brMalls, Multiplan, Iguatemi e Aliansce] went to the stock exchange, everything became much more impersonal”, he says. Hence comes part of the “hardness” in the negotiations experienced by shopkeepers.

In Foganholo’s opinion, malls will face many stress tests this year: doubts about the progress of the pandemic, the election year and its effects on consumer confidence and especially the unfavorable macroeconomic conditions, with the wage bill falling and the inflationary pressure.

Fernanda Rodrigues, an analyst at Lafis Consultoria, agrees. “The macroeconomic context is bad and there is a scenario of political and economic instability on the horizon”, she says.

Luís Augusto Ildefonso, institutional director of Alshop – Brazilian Association of Shopping Shopkeepers, confirms that times were better. “Nominal sales for 2021 showed a drop of 3.65% over 2019”, he says. He believes that the ventures will no longer need to close their doors as in the past, but the pandemic remains a factor that generates doubts about the operation.

Another point of conflict between shopkeepers and administrators is the charge on online sales. In the pandemic, with malls closed, many shopkeepers sought to sell through marketplaces or WhatsApp. In the latter case, malls do not usually have a share of sales.

Some ventures sought to create their own marketplaces and manage remote sales. Multiplan and brMalls, for example, created the Delivery Center in 2016. In November last year, the delivery company closed its doors, without much explanation.

In the opinion of the president of a network of satellite stores, this account was impossible to close: there were high investments in the Delivery Center that did not justify a demand for remote sales that reached, at most, 15% of the total sales of the store, over the which the mall had a stake. According to him, the franchises of the same chain belong to different shopkeepers and it was necessary to have a very well-oiled logistics to differentiate stocks from each of the hundreds of stores in each of the undertakings.

“In this challenging context, one of the options may be mergers or acquisitions”, says Fernanda Rodrigues, from Lafis, giving as an example the movement of approximation between brMalls and Aliansce, announced at the end of December. There is still no formal proposal for a merger, only the signaling of interest.

“The large administrators can push a consolidation movement in the sector, in order to reduce administrative costs and gain scale, but this is not obvious”, says Ygor Altero, an analyst at XP Investimentos. According to him, companies listed on the stock exchange want to grow with good assets. And this also includes the management of its tenant portfolio. “Administrators may be interested in getting rid of less productive stores.”