An estimated 3.5% increase in turnover of trade last year has put a smile on Cyprus retailers as they look forward to 2020 with optimism.
Boosted by Black Friday and the holiday season sales, retailers saw a record year in retail sales since 2013, as they expect further growth in the sector for a fifth consecutive year.
Talking to the Financial Mirror, Marios Antoniou the general secretary of the Cyprus Association of Retail Trade Enterprises, said although the association does not have conclusive figures, its members reported that they are pleased with turnover in 2019 and the holiday season.
“Despite initial concerns stemming from the expected drop in tourist arrivals the association’s initial estimates show that retail sales turnover has increased by approximately 3.5%, which is close to the growth rate of the country’s economy,” said Antoniou.
He noted that gift shops and retailers selling electronic devices have done particularly well, seeing their sales significantly boosted by Black Friday and the holiday season.
The increase follows that of 2018, when according to Cyprus Statistical Service data, the local retail trade sector grew by 5.4% compared to 2017, again surpassing the economy’s growth rate which stood close to 4%.
In 2017 volume growth in retail sales reached 6.4% compared to the previous year.
The total value of returns made by the retail sector is estimated to stand at €2 bln, making it the second-largest contributor to the Cyprus economy after tourism. As Antoniou noted 1 out of 5 Cypriot employees work in retail.
Encouraged by the growth of the retail market, local and foreign investors are strengthening their presence in Cyprus, said Antoniou.
“All evidence suggests that we are in for another good year. Competition in 2020 will grow due to new supermarkets and shopping centres, while several foreign brands are planning to expand their activities to Cyprus,” said Antoniou.
Meanwhile, local and foreign supermarket chains are expanding their business.
Paphos-based Papantoniou supermarkets, after expanding to Limassol launched their new store in Engomi, Nicosia at the end of 2019, while Nicosia-based AlphaMega has expanded to Paphos.
Commenting that competition will be intense, Antoniou noted that it will remain within healthy boundaries but there is not much more room for new chains or expansions by existing supermarkets.
“Although we are nowhere near the numbers of sale points, we had in 2012 when we saw the collapse of Orphanides supermarkets which had 30 stores. In 2012 there were 202 stores, while currently there are around 150 in operation.”
Antoniou said that consumers will be the main beneficiaries from the increase of competition in the retail sector as prices will drop.
He said that the association is doing its best to encourage its members to digitalise their businesses by investing in e-commerce.
“Businesses are not making the move to digitisation, thinking that Cyprus’ environment is not favourable for online shopping. Businesses feel that distances in Cyprus are small and feel that Cypriot consumers prefer a hands-on shopping experience.”
Although, as he acknowledged, this is to some extent true, Antoniou stressed that businesses should not ignore the great prospects e-commerce have to offer, as the younger generations want to have the choice of shopping online on their mobile devices.
