Retailers learn difficult lessons

Hyderabad, Oct. 29: If you thought it was only IT and manufacturing companies which used cost cutting as their weapon to fight the slowdown, think twice. Watch closely the shopping malls where you hangout over weekends. From using CFL bulbs that reduce power consumption to linking payments to performance, cost cutting has become the mantra for retail industry that is helping them navigate through the slowdown.

“The financial crisis, for all the retailers, was actually a good learning experience. It actually made us cost conscious,” said Mr Vinay Bhatia, the vice-president of ShoppersStop.

Cost optimisation was key to survival, Mr Bhatia says adding that many retailers have adopted new methods to minimise their operating costs. “For instance, we are now using CFL bulbs in order to minimise the power bill.”

To address high rent problem, developers and mall owners have adopted revenue sharing model. “In this model, the developer will earn more, if the footfalls and sales rise and make the malls more viable,” he said.

Mr Kumar Rajagopalan, the CEO of industry body the Retailers Association of India (RAI) agrees, “the slowdown has helped everybody to understand that the revenue sharing model is good for all the stakeholders.”