Pandemic affects mall movement and could threaten sales recovery

With the advance of the coronavirus pandemic in the country, the networks of shopping malls are experiencing a moment of uncertainty about how the movement will be in the shopping centers in the coming weeks. The flow of visitors is beginning to be affected, according to representatives of retailers, which may call into check the recovery of sales recorded in previous months and even raise the default of shopkeepers that took years to be normalized after the crisis. "The movement has dropped significantly in the last 48 hours. There was a 30% drop in store visits and about 20% to 30% in sales," says Tito Bessa Júnior, president of the Brazilian Association of Satellite Retailers (Ablos) and founder of the TNG fashion chain. "If this result occurred in two days, imagine in the coming weeks. If it continues, the shopkeepers will not have the resources to pay rent to the owners of malls", he declares. Ablos represents the smaller stores. It has about 100 associates, including TNG, Barred's and Mr. Officer (clothing), Doctor Feet (services), Cheese Bread House (food) and SideWalk (footwear). Bessa requested a meeting with the Brazilian Association of Shopping Centers (Abrasce), representative of mall owners, to discuss joint measures to ease the turbulence. It does not rule out asking for easing in rent, condo and operating fees until the impact on sales is dispelled. "We need to find a way to manage the situation, otherwise it will turn into war. We need to understand that the whole world is facing a difficult time and that everyone needs to help each other," says Bessa. The Brazilian Association of Shopping Retailers (Alshop), which unites retailers of varying sizes, has a more restrained view. "So far the movement is close to what it has always been," says director Luis Augusto Idelfonso. According to him, there is prospect of a drop in consumer flow over the next week. Asked about the divergence of perception with Ablos, Idelfonso assesses that some segment may have already suffered a drop in sales due to the high dollar or the shortage of Chinese products, but this was not significant for the sector as a whole. "In any case, we hope to have a more accurate thermometer next week." Ildefonso agrees that if there is a prolonged scenario of falling sales retailers will have difficulty paying rent. "If the problem is lasting, new negotiations will probably arise between shopkeepers and mall owners, just as we saw in the crisis." Research The speech of the mall owners is that the movement is regular, although it is not known until when. Abrasce did not grant an interview, but said in a statement that it has ongoing research to identify possible impacts on the sector. Mall operators have stepped up the cleaning of elevators, escalators and handrails, and launched campaigns to disseminate information on virus prevention. "The flow is normal. On the weekend of March 7 and 8 we saw a slowdown in São Paulo, but it was still good in other regions," said Rafael Sales, president of Aliansce Sonae, in a meeting with investors. The company has 27 malls in the portfolio, four of them in São Paulo, where the majority of cases of the disease are located. "With the growth scenario of the virus we can have an impact, but that has not yet happened. We take measures to raise awareness and keep malls open," he said. The group stocked water, alcohol gel, diesel for generators and cooking gas for the food courts. "The flow was normal, but we think it's possible that the scenario will change," BRMalls President Ruy Kameyama also told investors. "It is difficult to make a prognosis of what will happen because there is no clarity on our side or from the shopkeepers about the intensity of the effects. Everyone is looking to be prepared." "We've seen that the movement is normal compared to the same time last year," says Vander Giordano, vice president of Multiplan. The movement will depend on the pace of spread of the disease and possible restrictions on the movement of people, say entrepreneurs. Another point of attention is fake news. The Paineiras Shopping, jundiaí (SP), was the target of news that it would close the doors indefinitely, which was disproved