The failure of Greece’s political parties to form a government and the continued uncertainty in the country’s political sphere couldn’t have come at a worse time for Greek retail stores, whose owners are already at their wit’s end over consumers’ reluctance to buy. As professionals and their representatives have noted time and again, the political vacuum comes on top of rising unemployment, dwindling household budgets and job insecurity -- the three key factors that have kept shoppers away.
As it appears unlikely that the situation will change anytime soon, real estate market representatives warn it is highly probable that within the next few months we will not only see shops closing down one after the other, but entire strips becoming deserted. For example, they cite Aghiou Meletiou Street between the busy Acharnon and Patission thoroughfares in central Athens, where around half the stores have closed down, similarly to once-bustling commercial strips in the northern suburbs of Halandri and Maroussi, and even in the upmarket city center district of Kolonaki.
Low consumer interest during the winter sales further disheartened retailers and hastened the course of the downward adjustment in the market for commercial property, where property values and rents are plummeting.
According to data published recently by the Hellenic Statistical Authority (ELSTAT) concerning retail sales in February, turnover (not including fuel sales) declined by 10.9 percent compared to the same month in 2011, and that on top of a 8.8 percent drop from 2010 to 2011.
The figures clearly illustrate the impact of the economic crisis and austerity measures on the retail market, but they are also a bad omen for the owners of empty commercial properties as given the current climate, they will neither be able to rent them out nor sell them.
Shopping malls are unlikely to avoid the pain, despite the fact that owners and operators have launched numerous initiatives such as special offers and events aimed at attracting consumers. Their aim is to boost the sales of their tenants, as in most cases their revenues come not just from the rent they charge but also from percentages from sales. Either way, as many foreign analysts have also noted, the cost of rent is expected to continue declining this year as well, making marketing imperative for the survival of malls.