The Maharashtra State Government recently passed the Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, enabling owners of shops, hotels, theatres and multiplexes in the state to keep their establishments open round the clock, with an easier process of getting permissions and licenses.
This means that malls, multiplexes, restaurants and even small shops can be kept open till late in the night, with the caveat that police permission is required. This is in accordance with the Model Shop Act proposed by the Centre to facilitate ease of doing business, and the bill is now awaiting clearance from the legislative council.
On directives from Chief Minister Devendra Fadnavis, the State Government and BMC are also conducting a pilot project on Mumbai’s Nightlife. This project which will demarcate 3 non-residential zones in Mumbai which can operate until the wee morning hours (as late as 4 AM) and have liquor licenses.
Once enforced, these two regulations are likely to boost F&B, entertainment and retail markets in the ‘city that never sleeps’, as large malls, high street establishments and restaurants will see a gradual increase in footfalls. We are also likely to see rooftop restaurants opening in five star hotels, as the rooftop restaurants policy is being actively reconsidered by the Government.
In fact, even the food trucks are in for a new lease of life. Mumbai currently does not have a clear regulatory framework for this business model, and the CM has issued a directive to formulate a special policy to encourage the food trucks business.
The increased hours for shopping and entertainment can have several implications:
As a general rule of thumb, value formats in Indian retail estimate footfalls between 6-10 PM as double of those seen from 10 AM to 6 PM. This applies to potential revenues as well. Generally, the same rule is accepted for weekends vs. weekdays, where weekends witness twice the footfall seen during weekdays.
With consumer behaviour generally following the pattern of shopping, movie/entertainment and dinner (in that order) the most likely beneficiaries of late night permissions will be the food and entertainment category. F&B and entertainment is already recognized as the key differentiator for India malls, as the space currently allocated to this category across some of the top malls illustrates:
The real benefit and outcomes of the policy will become evident only once it is implemented, and the spirit of the implementation will be a good indicator for assessing the essential benefits it brings.
Authored By: Ashutosh Limaye, National Director – Research, JLL India
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