Ideas & Debate

Proliferation of shopping malls in suburbs signals economic slump

riviera

Rosslyn Riviera Shopping Mall on Limuru Road. PHOTO | SALATON NJAU

A story in a recent edition of the Financial Times, described how the mall was the heart and soul of suburban American life at the ebb of the Cold War era. Here family units shopped, teenagers hung-out with their friends and even a few low-budget films were set.

Both the scarcity and novelty of the products to be found in these malls made fickle customers abandon the small retail outlets in their street corners for the splendour of these newly molted outfits. Their golden era was in the 1990s when a steady increase in population brought about bustling business.

Come the early 2000s, disruption of the business models of yore was brought about by e-commerce, where companies like Amazon and Alibaba took full advantage of antiquated norms to blow unprepared and unadapting competitors out of the water. The mall bubble had burst.

Many are the firms that filed what in American corporate legal parlance is described as ‘Chapter 11 bankruptcy.’ The shot-clock on the magnetism of the mall of days bygone has nonchalantly tapered to nought in the unfortunate epoch of the pandemic of our time — Covid-19.

The New York Times in 2015 ran a piece —An Ode to shopping malls. The prelude to this melancholic piece read, “Farewell to pleasure palaces of days past. In no dissonance to how a filmmaker’s series chronicles a lifestyle as it approaches its nadir.” That was the situation in America and Western Europe.

Reminiscent of monkey see monkey do; Kenya is firmly on the downhill slalom on the slippery slope that is the ‘mallification’ of every space for enterprise.

In our heritage of splendour, the investment mantra at play today by many saccos, ‘chamas’ and investment vehicles is that if you have mobilised some sizeable heft of disposable revenue, all you have to do is acquire a huge chunk of unproductive land in the middle of nowhere, fence it, put up gargantuan water tanks before bankrolling a ceaseless media advertisement campaign to signal your intent to create a gated-community. In the essence of decongesting the City of Nairobi, a myriad such outfits bestride the landscape within the metropolitan area. After attracting a sizeable number of investors, aggressive construction of residential apartments will ensue with almost certain immediate occupation.

In the foregoing, a pragmatic entrepreneur will realise that all these people will sooner rather than later yearn for a shopping centre, public services, infrastructure, amenities, recreational facilities, amusement parks and other creature comforts within proximal range. That is when an idea will burn bright inside one’s cerebral cortex. Let’s open a shopping mall to cater to the lifetyles of the burgeoning community of urbanites.

In the advent of the property boom attributed to the fiscal prudence of the Mwai Kibaki administration that put money in the middle class’s pockets, many such developments started coming up.

People have even gone as far as to uprooting formerly lucrative foreign exchange-earners like coffee and tea in difference to real estate. This modus operandi has not been restricted to the residential real estate but also office space and business premises.

But the proliferation of malls has approached epidemic proportions as now we even find them competing for the same demographics, which is farcical to put it generously. Within the Nairobi–Kiambu nexus is an area served by the divergent and nearly parallel Limuru and Kiambu Roads sliced by a transversal thoroughfare, the Northern By-pass. A small area of about 25 square kilometres is served by nearly six adjacent malls scarcely abut of each other.

In Ridgeways, we have the old Nakumatt Ridgeways Mall on one side of Kiambu Road meanwhile within Wi-Fi range, across the road another investor opened the pristine Ciata City Mall. About 2km down the same road is Quickmart Mall, Thindigua.

Returning to the junction and taking the Northern By-pass, you will soon find yourself marveling at the megalithic Two-Rivers Mall.

Traversing through the Two-Rivers will take you to Limuru Road and within a slug’s crawling distance is the Rosslyn Riviera Mall. Three kilometres further up-stream and you are face to face with the vintage Village Market Mall.

The melodrama of this scenario is in the stiff competition among the shopping malls all serving the same market segment, meaning any new entrant will only act to cut into the competitive advantage of the next store.

All these malls were most assuredly opened to ride the wave of the diplomatic corps, foreign missions and UN staff from Gigiri, Nyari, Kasarini and Runda estates adjunct to the rapidly growing middle-income areas of Ridgeways and Ruaka.

BARRIERS TO ENTRY

Truth of the matter is that the probability of meeting the same families and perhaps individuals in these establishments at different times of the same weekend is high.

Kenya today finds herself at a cul-de-sac. Do we continue allowing for the unregulated mushrooming of malls or do we engage in protectionism for retail stores and individual businesses to widen our taxation revenue base?

Do we place our lot with mallification or do we go all out into industrialisation? I may not be a thoroughbred economist but pragmatism dictates that barriers to entry should now be erected pertinent to curbing the overenthusiastic slide into the mall culture.

We need to build the resilience of multiple ventures to enhance the diversification of the offerings not just on the commercial front but also at the Kenyan marketplace and stem the tide of consumerism.

Mukoya is the operations director, Titek Solutions Limited.