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The Food And Lifestyle Sector Accounts For 80% Of Mall Occupancy

The occupancy rates of shopping centers for the third quarter of 2024, as shared by retail entrepreneurs and tenants, are being positively influenced by the growth of the food and beverage (F&B) sector along with lifestyle demands.

"At present, 80% of tenants, both local and international, looking to join Hippindo are mainly focused on establishing outlets in the fast food and coffee shop industries, highlighting a notable increase in F&B," remarked Budihardo Iduansjah, Chairman of the Indonesian Retailers and Shopping Center Tenants Association (Hippindo), during a discussion with Kontan on Friday, November 1.

Besides the food and beverage sector, the rise of lifestyle-oriented businesses is also playing a role in boosting occupancy rates as the year wraps up. "Lifestyle is not limited to clothing stores; it includes a variety of lifestyle needs, such as those provided by Miniso. Thus, it's important to take into account a wider array of lifestyle requirements," he added.

Budi also pointed out that while the growth in the F&B sector generates income for retailers, it brings its own set of challenges. Retailers need to implement different operational strategies compared to other types of tenants. "In large cities, setting up locations now demands careful planning regarding water and gas supply, as well as facilities for dishwashing and waste management. This differs from non-food and beverage tenants, who typically only require electricity," he clarified.

Budi from Hippindo has observed a rise in certain areas, but he also points out a downturn in the large-scale supermarket sector. He believes this shift is due to increased competition, with consumers now seeking more innovative offerings from supermarket chains. Nowadays, shoppers prefer supermarkets that provide additional features like food courts or entertainment options.

"They need to start creating new concepts. Being large isn't necessarily a disadvantage, but they must rethink their approach. For example, adding a food court inside the supermarket could be beneficial," Budi explained. "If they don't innovate and just stick to their current products, they risk falling behind," he warned.

Alphonzus Widjaja, Chairman of the Indonesian Shopping Center Entrepreneurs Association (APPBI), echoed these concerns, highlighting a drop in occupancy rates for Hypermarkets and Department Stores. "The increase doesn't apply to these categories, which continue to face challenges," he told Kontan.

He also shared that the average occupancy rate for shopping centers in 2024 is projected to be between 85% and 90%. As for mall developments this year, APPBI expects four new shopping centers to open in the Jabodetabek area by mid to late 2024: Agora Thamrin, Menara Jakarta Kemayoran, Living World Grand Wisata, and Pakuwon Mall Bekasi.

Tag: Food And Lifestyle Sector Hippindo Mall Occupancy