Starstruck: Mall Owners Relocate others for Starbucks

Brands that are being shunted to less attractive locations to accommodate the coffee chain are not amused

A joke doing the rounds on Twitter these days is that the wait outside Mumbai’s first Starbucks coffee outlet at Horniman Circle is so long that a smart alec has started selling tea to those standing in the queue.

Starbucks Coffee Logo

Starbucks Coffee Logo

This kind of consumer frenzy is music to the ear of mall owners in India’s big cities. Sensing a huge opportunity, many of them are offering the American coffee chain preferred locations within their malls, sometimes even at the cost of relocating a brand that is already present at the location.

It’s not as if the mall owners are expecting premium charges. They just want Starbucks as an anchor tenant as such iconic brands can bring home the much desired footfalls; and also inspire other quality labels to set up shop in their malls.

Starbucks had said that it plans to open 50 stores by the end of the year in Delhi and Mumbai. That plan may or may not materialise, but the coffee retailer surely is on the fast track to sign up new spaces. “For some international iconic brands, mall developers will be willing to bend backwards as they can improve the tenant mix,” says Jaideep Wahi, director, retail agency at Cushman & Wakefield India, a property advisory firm that helps companies such as Starbucks find store space.

The Ambience group has signed up Starbucks for two of its malls in Gurgaon and Vasant Kunj in the capital. At the Gurgaon mall, a brand that was on the ground floor is being relocated to another part of the mall to accommodate the coffee house.

“I am relocating a brand for Starbucks as we wanted to give them an indoor-outdoor combination,” says Deepti Goel, head of leasing at Ambience. Starbucks is negotiating for space at another mall in south Delhi. Arjun Sharma, the director of Select Citywalk mall in Saket says he would love to move brands around for the iconic brand. “It’s a relevant brand. It’s a great brand. We always seek marquee brands to improve our tenant mix,” he said.

Another developer in Mumbai, requesting anonymity, said he was even willing to compensate an existing store operator if he vacates his current location.
A Tata Starbucks spokesperson declined to comment on queries sent by ET.

The enthusiasm to put up Starbucks has caused heartburn among a few brands that have been asked to relocate. “We were asked to move to a less-attractive location within the mall, even though the mall owner agreed to give us favourable terms. But it still can’t make up for losing a premium location,” says a manager with an apparel brand, who did not wish to be identified for risk of antagonising the mall owner.

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