Cyprus retail still awaiting upsurge

Despite initially being encouraged by the February lifting of lockdown measures on retail stores, the sector is still reeling from months of inactivity and lingering trepidation from consumers.

“Cyprus retail stores enjoyed a decent amount of business in the first few weeks after being allowed to reopen in February, especially since most stores put a lot of their winter stock on sale,” said Cyprus Retail Association (Pasyle) General Secretary Marios Antoniou. Antoniou explained that the initial burst of discounts on seasonal and sought-after winter items aimed at providing a quick cash injection to retail businesses, boosting their immediate liquidity and helping to move some of their stock.

Despite the initial wave of eager consumers the mood has dampened since then.

“We had hoped that the recent lifting of measures on restaurants, cafeterias and the broader service industry, as well as the additional freedom stemming from the curfew relaxation and the third text on weekends, would help the sector further but we were sadly wrong,” Antoniou noted.

“People are more reserved and cautious at the moment. Their mentality is different when contrasted with the end of the first lockdown. There is no real enthusiasm to spend on retail as the persisting uncertainty is reflected on consumer spending habits,” Antoniou added.

While supermarkets and other retail businesses who offer food, drink and other basic necessities are naturally exempt from this slump, there is one more sub-sector of the industry which has been an exception to the rule.

“Do-it-yourself (DIY) businesses have had a lot of business during this time, as the lockdown has made people spend more time at home and reflect on what changes, repairs or renovations they might want to make,” said Antoniou, who also noted that clothing and shoe stores have felt a tremendous decrease to their sales.

The brunt of the pandemic’s impact has been felt in the tourist sector and the retail stores linked to it.

“In the Famagusta and Paphos areas, where under normal conditions clothing, shoe and souvenir shops would enjoy a decent amount of turnover, stores have suffered greatly. This is because of the lack of tourists from abroad and the limitations imposed on Cypriots who want to book a hotel in these areas,” said Antoniou.

“If we lose yet another summer tourist season, I am afraid that a lot of businesses will shut down permanently”, the Cyprus Retail Association Secretary General stressed.

The association is keen to highlight that more state support is necessary, though there is an understanding that things are difficult at the moment.

“We understand that the pandemic is a complex and difficult thing to manage and this is not exclusive to Cyprus, but we expected more assistance.The support from the state has been good for employment and people who aren’t business owners, but in terms of direct support to businesses we have sadly not seen enough being done. We needed a cheap and easy way to access capital,” Antoniou explained.

“There has been a proposal being knocked about in parliament for over a year but it failed to get ratified and has now been postponed to July when the new composition of the parliament assumes their duties. This is sad and unfortunate for the retail sector as it will affect supply chains, new orders and stock availability. We have a lot of backed up expenses, including rents and loan obligations. The government scheme where tax breaks were given to landlords who voluntarily lowered their rents has sadly not had any real effect,” he concluded.