Alsea and CMR ‘pulled down the curtain’ on 40% and 32% of their restaurants in food courts that suspended operations for now.
MEXICO (El Financiero) – In June, between 1,500 and 2,500 stores will shutdown. It represents between 9.3 and up to 18 percent of the 14,000 stores that operate inside shopping centers. They will close their doors permanently due to the landlords’ impossibility of reaching an agreement for the payment of rent, and because they have not received income for almost eight weeks that they remain closed, warned 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 will accumulate in the following months due to the expiration of leases of more stores that do not generate more than losses,” said URM.
In Mexico, there are more than 1,290 shopping centers with a profitable abrupt area (ABR) over 27 million square meters, according to the analysis firm of Georesearch.
Since the health emergency was declared on March 31, attendance at shopping centers has plummeted by more than 70 percent, as the only things that remain open are self-service stores and pharmacies.
“Virtually all the shops located in the shopping centers have stopped operating, and therefore stopped receiving income several weeks ago. Generally speaking, any retail chain has capital reserves that only allow them to survive for a few weeks without income,” said Jorge Lizán, general manager of Lizan Retail Advisors.
Fast food gets cold.
The restaurants negotiate with their landlords individually because they are franchises or small entrepreneurs in the area, said Jorge Yarza, a financial advisory partner at Deloitte’s Mexico-Central America Marketplace.
Although the restaurants seek to subsist on home delivery, only 15 percent of these businesses implemented it. However, their sales do not support the expenses they have, so even 30,000 tenants have already dropped the curtain indefinitely, warned Francisco Fernández, president of the National Chamber of the Restaurant and Spicy Food Industry (Canirac).
Alsea, the operator of Starbucks, Vips, Burger King, among others, reported a 67 percent drop in sales in April and keeps 40 percent of its 2,263 points of sale closed, most of them in shopping centers where it sought to negotiate costs.
“We are in negotiations with our owners about reducing rents, and we have already achieved significant savings. We are carrying 113 million pesos,” said Alberto Torrado, executive president 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, for being inside shopping centers.
WALMART AND SORIANA gave a two-month grace period to SME’s
In the part of self-service, Walmart, and Soriana, the two leading players by number of stores, with more than 3,300 sale points granted facilities for two months of the contingency for small and medium enterprises.
Soriana reported that it has 6,300 micro-companies that are part of its commercial premises, were offered rent bonuses for May and June.
Meanwhile, waived the rent for April and May to its 11,000 shops that have been limited or prevented their operations by not being considered essential activities, were
LIVERPOOL Real Estate branch gives two and a half months extension.
The Liverpool Real Estate Branch has 129 boutiques and 27 shopping centers, representing in the first quarter of this year 3.4 percent of its total revenue, an estimated 908.6 million pesos, and an amount that is projected to be reduced at least in April to June.
“We expect to have a reduction of 2 and a half months of fewer 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 do it, payment reduction or defer it until next year in some cases,” said in a conference with analysts Enrique Guijosa, director of finance of the Port of Liverpool.
They also negotiated with Walmart for the 160 Suburbia locations, a discount, not revealed, in the payment of rent, at least for April and May.
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