Declining sales due to economic slowdown have forced real estate developers in Vadodara to apply brakes to the euphoric development of malls and multiplexes across the city. Experts say that people are unwilling to spend and the overhead costs for maintaining the shopping malls have gone up. Recently, malls in Ahmedabad had to close down due to the rising operational costs. Now, it is the retailers in Vadodara who are finding it hard to survive.

Odyssey, a developer, was supposed to construct a mall near Rhino Circle in Vadodara. The project has been shelved for now. Another shopping mall near Indra Park, between Bhavan’s school and Dawat Hotel, was to come up, but work has not started yet. Siddhi-Vinayak Shopping Complex behind the railway station is ready for possession but yet to find a buyer.

“A group that was to set up a mall in Vadodara has stalled the project. They had booked the hotel, but now they say they don’t want to go ahead with the project, fearing it will not be sustainable,” said Samip Shah, a hotelier.

Even those who have developed and rented out properties have been forced to re-negotiate prices. “We had rented out space to a garment retailer. Since the garment industry has suffered a lot, they are now asking us to renegotiate the prices,” said Chandan Gyanchandani who developed the Trident Mall in Vadodara.

Experts are of the view that supply is more than demand and therefore, the business is no longer profitable. Customers are not buying anymore and the mall owners are feeling the pinch. “Suddenly, the cash in hand has gone down and customers are not buying. Hence, the business profitability has gone down,” said IIM-Ahmedabad professor Piyush Sinha.

Sample this

* Future Group closed down its 70,000 sq ft Big Bazaar near Shyamal Cross Roads in Ahmedabad.

* Subhiksha shut down a couple of stores in Ahmedabad and is re-structuring its business.

* RPG group owned Spencer’s retail does not find Ahmedabad a viable business option and has decided to quit.

* Indiabulls have also closed two of their hypermarts in the city, as they are restructuring their business.

Retail Association of India, Gujarat chapter president Deepak Agrawal said, “If the condition of the economy doesn’t improve, there is a possibility that retail will be wiped out.”