ESEE: Most retailers will run out of opportunities to absorb the increases

Despite the cumulative pressures from retailers, due to rising energy costs, more than half will run out of money to absorb prices on their own. However, those sub-sectors that are most strongly affected, directly or indirectly (eg due to transport costs), are less likely to absorb price increases (such as the food, household equipment) sectors. This emerged from a survey by the Hellenic Confederation of Commerce and Entrepreneurship for the movement of commercial stores during the festive season 2021.

In terms of the picture for the movement in the festive market in relation to 2020, it appears mixed, as 33% of companies recorded a decrease in sales, while 36% recorded an increase and 31% remained at the same level. In contrast to 2019, the turnover fell for 68% of companies.

It is noted, however, that companies that had the ability to sell outside physical stores (telephone orders, sales through social networks, site, e-shop) showed significantly better performance than those that did not. It should be noted that 32% of them were able to make sales outside of physical stores during the pandemic.

In more detail, the summary of results is as follows:

1. The first question was about the degree of satisfaction with the Christmas turnover. For 43% of businesses the traffic during the 2021 holiday season was moderate. On the contrary, four out of ten entrepreneurs (43%) said they were a little or not at all satisfied. Only one in seven companies appear very, very satisfied with its performance during the festive season.

2. INEMY-ESEE compared the same period with the corresponding one of 2020 and that of 2019, ie before the appearance of the pandemic. Thus, the picture for the market movement in relation to 2020 was mixed, as 33% of companies recorded a decrease in sales, while 36% recorded an increase and 31% remained at the same levels. In contrast to 2019, the turnover fell for 68% of companies.

3. However, the research shows that the companies that had the possibility of sales outside physical stores (telephone orders, sales through social networks, site, e-shop) showed significantly better performance than those that did not. It should be noted that 32% of them were able to make sales outside of physical stores during the pandemic.

4. Traditionally, the best time of the holidays is the week before Christmas, a trend that was confirmed this year as well. In particular, 56% of entrepreneurs said they had the strongest buying traffic in the week before Christmas while 30% recorded higher sales in the week between Christmas and New Year.

5. The turmoil that preceded the market pushed companies to make offers during the festive season. This business practice seems to be consolidating lately as a means of boosting the festive turnover. In fact, if food is excluded, then the share of companies that made offers during the reporting period increases to 50%.

6. The amount of offers moved to quite high levels, as two in three companies adopted discounts from 10% to 30%.

7. Despite the unfavorable business environment, 77% of companies met their obligations to the State (Financial Tax Office and Insurance Funds), a development that may be due to the relevant support framework.

8. In addition, differences are observed based on the geographical area of ​​activity of the company. The companies operating in the Aegean islands and in Crete presented better performance, compared to those of Northern Greece. This element can be explained by the stimulus of incomes due to the positive tourist season but also by the relatively high vaccination rates that facilitated the visits to the market.

9. The particularly high increase in energy costs has a negative impact on the operation of commercial enterprises as six out of ten stated that the negative impact is assessed from very to very strong.

10. At the individual sectoral level, food seems to have a higher burden due to the nature of their operation as they rely on the more systematic use of energy-efficient appliances (eg refrigerators). On the contrary, almost half of the footwear companies estimate that they will be affected, albeit to a moderate degree.

11. Despite the cumulative pressures on retailers, more than half will exhaust all price uptake by themselves. However, those sub-sectors that are most strongly affected, directly or indirectly (eg due to transport costs), are less likely to absorb price increases (such as the food, household equipment) sectors.

12. The market climate remains uncertain and full of challenges, as the first days of this winter discount season are already sluggish. In particular, almost four out of ten entrepreneurs predict that their turnover during this discount period will move to lower levels and only one in ten believe that it will move upwards.