COVID19: Retail shops fail to stimulate ‘numb’ market

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Despite reopening after 50 days of Cyprus lockdown, retail shops have yet to see their businesses take-off as consumers feel uncertain about the coronavirus-tinted future.

Talking to the Financial Mirror, Lena Panayiotou head of OEB’s Industrial Relations & Social Policy Department said shopkeepers are unsatisfied as they have yet to see a significant movement in sales.

“Retailers saw a large number of people coming through their doors, but sales were not satisfactory. Consumers seem to be a bit reserved over buying goods other than first-need items,” said Panayiotou.

She said there is a feeling of uncertainty about the day after, about how their purchase power will be affected in the weeks and months to come.

There is still a lot of uncertainty regarding when and how other restrictive measures will be lifted as this will depend on epidemiological data.

“If cases go up, people may see their freedom of movement taken away once more, which makes them hesitant when it comes to buying certain commodities”.

Panayiotou said the fact that leisure establishments have yet to open and it will take some time before a return to normal, has a psychological effect on consumers.

Retail shops and construction sites are concentrating on trying to keep up with health protection standards and are also affected by the uncertainty, which makes marketing campaigns an impossible task.

“However, the important thing for businesses is that they were able to reopen, no matter how difficult this start will be.

Right now, if we to conduct a survey about the economic sentiment prevailing in the market, businesses would answer with emotion rather than with a clear head,” said Pnayiotou.

General secretary of shopkeepers union POVEK Stephanos Koursaris told the Financial Mirror that the market is lifeless.

“While the construction industry and technical professions are entering a normal phase, retail trade is numb, as people remain cautious, fearing what the future may bring.”

“In shops selling clothes, for example, consumers are reluctant to buy anything as some 300,000 of our fellow citizens have seen their income slashed by 40% during the lockdown.”

Retail businesses and construction sites were the first to open on Monday in a phased exit out of lockdown, Cypriots were also allowed out more than once a day.

But shop owners found electricity bills and other bills from suppliers waiting to be paid along with the rent they were not able to cover during the lockdown.

Koursaris called on the government to step in and help shop owners out with issues like rent.

He argued that the proposal of the government for tax deductions to landlords who reduced their rents was more of a guideline and it would depend on the goodwill of property owners.

“We are asking for the state to step in and regulate the issue, with the state paying for one-third of rents for small companies, the owner of the property losing out on another third, and the shop keeper paying the third that will be left”.

POVEK also wants the state to help out small family businesses by directly injecting €500 mln without the intervention of the banks.

“The majority of small businesses are already in debt; they cannot take on more loans.”

Koursaris hoped that “as we enter a summer period that does not favour the spread of the virus and with further easing of restrictive measures, there will be better days for the retail trade”.

The Cyprus Chamber of Commerce (KEVE) reported that retail shops in certain sectors have seen a satisfactory number of sales.

“In some cases, sales are better compared to the same period last year. DIY and construction materials shops have seen sales increase significantly. On the other hand, some retail shops are struggling,” said KEVE general secretary Marios Tsiakkis.

He noted that it may be too early to come to any conclusions as to when retail shops will see their fortunes improving.