Retailers put great stock in little shops

Kiosk stores located in the middle of shopping centre aisles engage with high customer traffic

United Arab Emmirates - Abu Dhabi - Aug 03 - 2009 : Eros electronics kiosk at Al Wahda Mall. ( Jaime Puebla / The National ) *** Local Caption ***  JP EROS 03.jpg
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Retailers are moving to smaller kiosk stores in malls to be closer to high-traffic areas and generate more revenue with lower rents, industry insiders say. Eros Group, which sells Samsung and Hitachi, has opened two kiosks in Abu Dhabi and Sharjah in the past two months and planned to open two or three more by the end of the year, said Deepak Babani, the company's chief executive.

"The traffic near the kiosks is quite good so you have a lot of purchases which are instantaneous," Mr Babani said. "It's in the centre of the mall and it attracts much more traffic because it's open on at least three sides, sometimes four sides." Retail sales in the UAE have been hit hard by the economic downturn and were down by as much as 40 per cent in the first half of this year, compared with the first half of last year.

Retailers have been forced to become more creative to grab a slice of shrinking sales, while keeping a close eye on costs. Mr Babani said the smaller-format booths, which sell electronics such as mobile phones, Mp3 players and cameras, were a major part of Eros's expansion this year because they enabled it to have a presence in the better malls. It costs more per square foot, he said, but the money spent produced bigger results.

"A kiosk is normally not more than two metres or three metres wide, so you're talking about a small space," he said. "But for the space that you occupy, the revenue is much higher." Jinshad Haziy, the Dubai-based marketing co-ordinator for InstoreMasters, which makes retail booths, said kiosk sales were 20 per cent higher so far this year than the company's other products, such as digital signs and exhibition stands.

"Even though our customers' budget is less now, people are buying in the fast moving consumer goods department," Mr Haziy said. Grand Optics opened its first booth, Grand Sunglasses, on the ground floor of Dubai Mall two weeks ago to be closer to the high traffic, said Murad Sharabati, the eyewear retailer's national manager. This booth also helped to draw attention to Grand Optics' other location in Dubai Mall on the second floor, which saw less traffic, Mr Sharabati said.

Mark Morris-Jones, the senior director for retail and industrial property in MENA for the property firm CB Richard Ellis, said retail kiosks were becoming more common as newer shopping centres such as Dubai Mall had wide hallways that were able to accommodate them. As well, retail kiosks have become more sophisticated over the years, with booths featuring display cases and lighting, he said. Kiosks are also a cheap way for retailers and landlords to boost sales, Mr Morris-Jones said, adding that neither parties needed to spend thousands of dirhams to fit out a full shop.

"You bring a kiosk, which is ready made, plug it into a socket in the floor - that's it," he said. "It's relatively inexpensive for the retailer and landlord to get these things up and running. And from the landlord's point of view, there is very little or no capital required and the rent goes pretty much to the bottom line."