Small Town Malls Faring Better

Summer Mall and Kluang Mall have managed to outperform city counterparts due to their marketing strategies to improve customer relations and strengthen market position.

The nation's major cities may have experienced slower sales on the retail front last year but some malls in smaller towns appear to be doing better than their bigger counterparts.

While the main market's average rental yield is on a slow decline and the vacancy rate is on the rise, some of these surburban malls are near full capacity and outperforming the industry average.

Their key advantage is that they are the only big malls within the smaller towns and with the two back-to-back festive occasions - Christmas and Chinese New Year - are experiencing brisk business.

In fact, some of these surburban malls like Kluang Mall in Kluang, Johor and Summer Mall in Kota Samarahan, Sarawak are even experiencing growth. And with no other malls expanding into their territories, they are set to dominate their markets.

"We've noticed like most communities across Malaysia since the 6% GST (goods and services tax) implementation last April, consumers in general have become cautious with their spending," says Majupadu Deelopment Sdn Bhd executive director Tey Fui Kien.

Kluang Mall, with a rentable space of 335,594 sq ft, is developed and managed by Tenaga Nusantara, a related company of property developer Majupadu.

"In Kluang Mall, retail spending for major brands has remained steady, with some F&B [food and beverage] segments recording up to 10% growth. In general, the strong performers are the national brands with good brand recognition," she says.

However, it is no easy task to manage a slower growing consumer spending outlook, says Tey.

"Regardless of the industry you work in, a 'business as usual' attitude will surely sink your ship in these times," she says. She adds that her team has embarked on marketing strategies to improve customer relations to strengthen their market position and provide a multitude of events and activities for shoppers and visitors.

The Mall has also embarked on a strategic relocation exercise with more than 25 outlets since last year, and it has over 160 specialty retail shops to provide a better retail mix and experience, she explains.

New draws

Tey says the current environment presents an opportunity to strengthen the mall and spur new shopping by introducing new concepts to the market. "We are constantly on the lookout to improve Kluang Mall to create a better shopping experience," she adds.

The mall introduced three new international brands - H&M from Sweden, Uniqlo from Japan and Cotton On from Australia - to local shoppers over the past few months.

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