Unable to pay rent, Shimla traders vacate shops

Bhanu P Lohumi

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Tribune News Service

Shimla, June 30

With Covid-19 taking its toll on business, shops on the posh Mall Road, busy Lower Bazaar and other commercial areas are being vacated as many businessmen are unable to pay rents with no sales.

Some big companies, including multinationals, that were paying rents between Rs1.5 lakh and Rs3 lakh per month for big showrooms at prime locations like Mall Road in Shimla are now unable to pay the same and have fired their salesmen.

Over a dozen prime properties have been vacated in the town. A large number of offices have shifted to smaller accommodations with lesser rent. The situation is similar in the hotel industry. “Already, 10 hotels are on sale,” says tourism association member Anil Walia. Notably, Shimla hotels were only leased in the past and the sale of a hotel was an exception.

The situation is grim and with no business and income, many shop owners have reduced rents or deferred taking these in the lower bazaar because they know vacated accommodations would not be easy to put on rent again, says Shimla Beopar Mandal president Inderjeet Singh.

“Except vegetables, fruits, groceries and chemist shops, the sale of other items is less than five per cent, which is totally unsustainable,” he said, adding that during the past three months, about 50 per cent of the 20,000 employees engaged with 4,000 shopkeepers registered with the Beopar Mandal Shimla had lost their jobs.

“We were already suffering since demonetisation, followed by implementation of the GST. Now, when things were beginning to improve and people got accustomed to the new tax system, the pandemic spelt doom on business,” says Varun Sood, a shopkeeper who sells readymade garments.

The face of the Mall Road has changed a lot in the recent years due to the decline in profits. Input expenses have been increasing and sales have taken a beating. Besides a complicated tax regime, there is stiff competition from multinationals and online business. As a result, many shop owners had rented out their shops to big brands.

There are over three dozen banks and ATMs on Mall Road. Every third shop has turned into a glittering showroom. In another trend, international food chains have occupied the second storey on the Mall Road. However, Covid-19 has resulted in total disaster on the economic front.

Posh areas affected too

Some big companies, including multinationals, that were paying rents between Rs1.5 lakh and Rs3 lakh per month for big showrooms at prime locations like Mall Road in Shimla are now unable to pay the same and have fired their salesmen. Over a dozen prime properties have been vacated in the town.