Retailers having trouble adjusting to the new reality

Those operating in the Greek retail sector are now facing a serious battle for survival. According to figures released by the National Confederation of Hellenic Commerce, retail sales during the Greek Easter period were down 18 to 21 percent in the apparel/footwear category and 11-13 percent at department stores compared to last year.

Turnover was also down from 2011, declining to 4.5 billion euros from 5 billion last year.

The slump in local retail operations is also reflected in company results which until recently had been registering rising turnovers.

Attica Department Stores SA, for instance, saw a decline in sales at its downtown Athens store which reached 17 percent during Easter and 15 percent in the first quarter of the current year. According to Attica’s managing director Constantinos Lambropoulos, more businesses are bound to be forced to shut up shop this year as they are fighting an uneven battle. It is worth noting that according to figures released by the European Commission with regard to the Greek retail sector in the first half of 2012, about 1,000 companies are going out of business every week.

Vassilis Masselos, president of the Hellenic Fashion Industry Association, strikes a similar tone, arguing that while local demand has “collapsed,” there is great mistrust vis-a-vis Greek exporting companies doing business abroad.

Meanwhile, sales at Notos Galleries recorded a drop of 15 percent during the Easter period, effectively crushing the group’s expectations for the entire year. In its efforts to reignite consumer interest, the group’s management has undertaken a number of initiatives, launching a collaboration with local furniture specialist Neoset at its Notos Home store on Kotzia Square in central Athens, among others.

At the same time Fokas department stores are facing some major financial difficulties, a situation which led a number of the company’s employees to stage protests in a bid to be receive unpaid wages. In this climate, slashing prices could be the only solution left for companies that can stand the heat and are currently trying to redefine their market position.

An example of this is local apparel firm Raxevsky, while similar moves have been made by companies operating in the furniture industry, with chains including Habitat, Entos and Neoset lowering prices by 20 to 30 percent.

Readjusting to the new reality is a necessary and painful procedure for the Greek retail sector. According to research conducted by the Boston Consulting Group, 73 percent of Greek consumers have fully accepted the idea that they now have to consume less than in previous years, 90 percent are spending less on goods which are not defined as necessities, while 75 percent are now spending more time seeking out lower prices. 

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