Filenews 8 June 2024 - by Angelos Angelodimou
Satisfaction prevails among retailers with the movement in the market, and this despite the tightness observed among consumers in terms of their purchasing power.
As industry professionals argue, market prices have stabilized and this is shown by the latest inflation data, which shows that food inflation was lower than general inflation.
At the same time, retailers are putting on the table two big issues that concern them. The reduced VAT rate on some basic products, for which they are asking for an extension, and the issue of staff, where there are great needs, which are expected to grow even more with the operation of two new shopping centers in Limassol.
Market movement
More specifically, speaking to "F", the general secretary of the Pancyprian Retail Association (PASYLE), Marios Antoniou, referred to the issues that concern the industry, market trends and the demands of professionals. Specifically, regarding the movement in the market, Mr. Antoniou said that retailers are satisfied and this despite the tightness that prevails among consumers.
According to the latest data of the Statistics, the Turnover Value Index of Retail Trade increased in April 2024 by 6,5%, compared to the corresponding month of the previous year. During the same month, the Turnover Volume Index of Retail Trade increased by 5,3%, compared to the corresponding month of the previous year.
For the period January-April 2024, the Value Index is estimated to have increased by 5.7% and the Volume Index by 5.0%, compared to the same period of 2023.
Inflation
Both food, clothing and footwear, as well as the DIY category, are moving quite satisfactorily, noted Mr. Antoniou. At the same time, he said that prices, mainly in the food market, have stabilized and this is shown by the latest inflation data, which showed that food inflation was lower than general inflation.
Furthermore, he added that despite the increased operating costs (electricity, interest rates, labour costs), entrepreneurs largely absorb any increases, due to the great competition prevailing in the market.
Reduced VAT
The Secretary General of PASYLE referred in particular to the issue of the reduced VAT rate, arguing that this measure has significantly helped to contain prices. The measure ends at the end of the month and, as is known, the EU does not support the continuation of horizontal measures, Antoniou noted.
However, he continued, because this measure helped significantly, we would support a continuation of the measure on targeted products to help the consumer. Specifically, Mr. Antoniou referred to infant formula, adult diapers and meat.
As he explained, these products have high consumption and with any return of VAT to normal levels, they will record a significant increase in their prices, resulting in a significant burden on the consumer. Therefore, any decision on a targeted continuation of the measure would be more than welcome, he said.
Lack of staff
The lack of staff continues to be a serious factor in retail, Antoniou said, noting that every day there is a struggle to meet the needs that exist. As he said, we should credit the Ministry of Labor for the fact that it has accelerated the procedures in relation to the examination and granting of permits for workers from third countries, but the needs are great and continuous effort is needed.
It is currently estimated that about 3,000 additional workers are needed. However, with the opening of the two new shopping centres in Limassol, another 2,000 will be added, Antoniou underlined. Demand cannot be met by supply and therefore it becomes necessary to find staff from third countries, he continued. He added that housing for these people is also a serious problem.
Behaviour and online purchases
According to Mr. Antoniou, consumers are now very thoughtful about their purchases. They make shopping lists and do not escape from them, he said, while he added that in several cases they visit two or three supermarkets to find the cheapest products.
In addition, the Secretary General of PASYLE said that there is an increasing trend in the purchases of private label products, which is also evident from the turnover of these products. Businesses have invested a lot in private label products, so they are of fairly good quality, since companies promote them under their name, Antoniou said.
We couldn't help but ask Mr. Antoniou about online shopping, as it is a trend that is constantly gaining ground. As he characteristically mentioned, online trade is a one-way street. It is the present and future of the market and that is why businesses invest in this part.
However, Antoniou pointed out, in Cyprus we are still at an early stage as far as online shopping is concerned. The figures are still in single digits in relation to the total turnover of retail trade, he noted, while Cypriot companies are still far behind what is currently the case in the rest of Europe. The prospect, however, exists and it is expected that gradually this option will develop considerably in our country.
