Mexico: In June, up to 2,500 stores will be closed in shopping centers


Mexico: In June, up to 2,500 stores will be closed in shopping centers
  • Alsea and CMR ‘lowered the curtain’ in 40% and 32% of their restaurants in squares that have suspended operations for now.
  • bulletWalmart and Soriana discounted two months rent to tenants in their stores.

MEXICO: In June, between 1,500 and 2,500 stores, which represent between 9.3 and 18 percent of the 14,000 stores that operate within shopping centers, will definitely close their doors, given the impossibility of reaching an agreement with the lessors for the rent payment and because they have not received income for almost eight weeks that they remain closed, alerted the Union of Retailers of Mexico (URM).

“We estimate that between 1,500 and 2,500 stores will be closed between June and July, which represents almost one million square meters that will remain vacant, plus those that accumulate in the following months due to the expiration of more store leases. that they only generate losses ”, answered URM.

In Mexico there are more than 1,290 shopping malls that mean an abrupt profitable area (ABR) of more than 27 million square meters, according to the Georesearch analysis firm.

Since the health emergency was issued on March 31, assistance to shopping centers has plummeted more than 70 percent, since the only things that remain open are the supermarkets and pharmacies.

“Practically all the stores located in the shopping malls have stopped operating, and therefore stopped receiving income several weeks ago. In general, any retail chain has capital reserves that only allow them to survive for a few weeks without income, ”said Jorge Lizán, CEO of Lizan Retail Advisors.

Fast food ’gets‘ chilled ’

The restaurants negotiate individually with their landlords, since they are franchises or small entrepreneurs in the area, said Jorge Yarza, partner in Deloitte’s Mexico-Central America marketplace financial advisory.

Despite the fact that restaurants seek to subsist with home delivery, only 15 percent of these businesses implemented it, however, their sales do not support the expenses they have, so even 30 thousand tenants have already lowered the curtain indefinitely, Francisco warned Fernández, president of the National Chamber of the Restaurant and Seasoned Food Industry (Canirac).

Alsea, operator of Starbucks, Vips, Burger King, among others, reported a 67 percent drop in sales in April, and maintains 40 percent of its 2,263 sales points closed, most of them in shopping centers where they searched negotiate costs.

“We are in negotiations with our owners on the reduction of rents and we have already achieved significant savings, we have 113 million pesos,” said Alberto Torrado, CEO of Alsea, in a conference with analysts.

For its part, CMR, operator and owner of brands such as Sushi Itto, Olive Garden, Red Lobster, among others, closed 58 units, 32 percent of its restaurants, as they are inside shopping malls.

Walmart and Soriana gave Pymes two months

In the self-service part, Walmart and Soriana, the two main players by number of stores, with more than 3,300 points of sale, where also commercial local rents to SMEs, granted facilities for a two-month contingency.

Soriana reported that it has 6,300 micro SMEs that are part of its galleries and business premises, to whom they offered rental bonuses for May and June.

Meanwhile, Walmart to its 11 thousand business premises that have seen their operations limited or impeded due to not being considered essential activities, the rent for April and May was waived.

Liverpool Real Estate gives two and a half months of extension

The Port of Liverpool in its Real Estate business has 129 boutiques and 27 shopping centers, which represented 3.4 percent of its total income in the first quarter of this year, an estimated 908.6 million pesos, an amount that is projected to be reduced at least in April to June.

“We hope to have a reduction of 2 and a half months of less payments, and we are giving the option to all tenants to choose how they can compensate that in the following months, when they want to, reduce payment or defer it until the following year in some cases ”Enrique Guijosa, chief financial officer of The Port of Liverpool, said in a conference with analysts.

Likewise, they negotiated with Walmart, for the locations of the 160 Suburbia, a discount, which was not disclosed, in the payment of rents, at least for the months of April and May.