Hammered by austerity measures that have made Greeks slow spending almost to a standstill, and with transportation strikes preventing customers from getting into downtown Athens, Greek retailers are set to see Christmas and New York holidays sales drop at least 18 percent from last year’s disastrous season.
As the country nears the end of a fifth year of recession, with unemployment at a record 26 percent and expected to hit 29 percent next year as a new $17.45 billion spending cut and tax hike plan takes effect, thousands more stores could close in 2013, worsening the country’s economy despite continued bailouts from international lenders that will total $325 billion.
The rescue monies came with conditions of big pay cuts, tax hikes and slashed pensions, undercutting the government’s efforts to stage a rebound and bring in more revenues as tax projections have fallen short despite higher levies. The economy will shrink as much as 4.5 percent in 2013, the Bank of Greece forecast on Dec. 3.
The National Confederation of Hellenic Commerce provided the sales drop estimates and said that spending on food and gifts will fall to 7.6 billion euros ($10 billion) this month from 9.25 billion euros ($12.25 billion) in December 2011. Expenditures will be 65 percent less than the 21.9 billion euros ($29 billion) recorded in the same month of 2008, at the start of the financial crisis, the confederation said.
The cost of a family Christmas dinner, based on an identical basket of products, will fall to 151.56 euros ($200.80) this year from 158.93 euros ($210.57) in 2011 as lower prices for red meat, fruit and vegetables help to offset higher prices of turkey, wine, feta cheese and olive oil, according to the statement.
Greek retail spending for the whole of 2012 likely won’t exceed 50 billion euros, ($66.2 billion,) down from 60.5 billion euros ($80.14 billion) in 2011, the confederation said. With holiday sales accounting for the bulk of many store owners annual revenues, the losses this year could mean the end for many of them whose empty storefronts will join a long line of them.
(Source: Bloomberg)
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