Mauritius: Shopping Mall Fever Hits Island

Shopping malls are all the rage now in Mauritius. New ones seem to be sprouting up by the month. But can the 1.2m population of this island nation sustain these huge malls with their fancy and expensive imported items? Will they be the magnet to attract yet more tourists, as they are expected to do?

Mauritius seems to be sprouting shopping malls by the handful. The current list includes: Bagatelle, Shoprite, Jumbo Phoenix, Phoenix Les Halles, Ebene Commercial Centre, Emerald Park, Ruisseau des Creoles, Cascavelle Shopping Park, and the upcoming La Croisette, the Circle Square and Flacq Shopping Mall.

There are more shopping complexes in Mauritius than its 1.2m population would actually have time and money to visit. But with a changing lifestyle, Mauritians have gone ‘shopping mall crazy’ during the past decade. They no longer roam the old streets of the capital or the shopping arcades of Rose-Hill or Curepipe, two very popular towns in the island, as in the past.

They travel a lot and are exposed to foreign goods and media. They consume differently, now, preferring new and modern shopping centres that offer much more with cinemas, restaurants, leisure parks, food courts, skate parks, kids’ corners, local and international trade-mark shops, all gathered under one roof and where there is of no worry about either parking or security.

The threat of economic turmoil abroad has not restrained middle-class Mauritians from spending money on imported goods sold at locations that are full and alive with people.

“The population has responded very well to our product. They have given it a warm welcome that is beyond our expectations,” says Hector Espitalier Noel, CEO of ENL Property, the owner of Bagatelle.

This is the latest mall inaugurated a couple of months back, situated in the centre of the island on the road to the airport. South African group Atterbury owns 49%. Whatever the product or the service, quality remains a priority, says Coraline Cortot, marketing manager of Bagatelle Mall. In the north of the island, on Grand Bay, a coastal and tourist village, work on the giant La Croisette mall is progressing fast. It is scheduled to open in September 2012 and will contain cafeterias, libraries, shops, supermarkets, cinemas, financial offices, banks, beauty parlours, tennis courts, gyms and even residential accommodation.

Architect Tom Cox says this mall will become the an economic, social and cultural attraction pole for the region. The whole purpose of this kind of development, he says, is a 24-hour cyle. “It is shopping, entertainment, leisure, living, working – everything happening within a controlled, precise zone,” he adds.

Operating shopping malls has become a new business trend on the island. Investors went into malls when the island’s former economic mainstays, sugar and textiles under  preferential trade agreements wound down. Today, shopping malls are everywhere at strategic locations near important road networks and population concentrations. They are clean, easily accessible, secure, spacious and comfortable. But competition between the malls is fierce. Jean-Philippe Venpin, General Manager of Winner’s supermarkets, observes wryly, “Definitely, there’ll be some repercussions on some of the supermarkets because of competition.”

Modern retailing

Prime Minister Navin Ramgoolam has no problem with the population’s aspirations to a better quality of life, more sophistication and modernity as Mauritius continues on the path of progress and prosperity. Inaugurating the Bagatelle shopping mall, he said that the growth of the travel industry and the expansion of the middle classes has made retailing one of the largest industries in the world.

However, he pointed out that since the purchasing power of the island’s middle-class population was not sufficient to make these new malls profitable, a foreign clientèle has to be attracted. Several emerging economies have capitalised on this and are reaping the benefits of modern retailing. Ramgoolam views global ‘shopping tourism’ as an industry worth around $34bn per year, the fastest growing retail channel after the internet.

He believes that the shopping options on offer have a significant influence on the choice of destinations for tourists. Shopping malls, he says, will further diversify the island’s economy and its tourism market while ensuring world-class development in the island itself: “It will definitely boost the attractiveness of our destination and help maintain our growth momentum.”

Mauritius’s target is to attract 200,000 brand-conscious visitors by 2014, making shopping tourism a major pillar of the island’s economy.

Analysts believe the shopping mall phenomenon will continue in Mauritius as long as the contribution of wholesale and retail trade to the island’s GDP keeps on growing.

This sector is worth about $1bn – three times more that 10 years ago. It has been supported by the rise of investment in real estate and construction, accounting for more than 38% of total FDI over the past five years. In 2010, the sector attracted investment of $750m, of which $160m was FDI. It employs more than 58,000 people and accounts for 19% of the island’s GDP.

Investment in the construction industry and in real estate is expected to expand at a rate of over 8% this year, according to official statistics.

This is particularly heartening given the dismal economic outlook internationally but it does not please Yousouf Jhugroo, chief executive, Consumer Protection Bureau (ICP Europe) and ICP Mauritius. He is concerned about this trend because, he says, the prices at which goods are sold in these malls are beyond the means of the average local person. Some products are sold at prices even higher than in theUK, he told African Business. Jhugroo observes that these hypermarkets place a lot of emphasis on imported goods, affecting adversely the island’s balance of payments. Imported goods will kill local produce, he claims.