Greek shop owners pin hopes to beat recession blues on early winter sales season

09:44, January 05, 2011      

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Greek shop owners try to beat the recession blues in the retail market after a bleak holiday season with early sales, offering up to 30 percent discounts on average, the Athens Traders Association (ATA) said on Tuesday.

In the first business day after the New Year's Eve break, shop owners tried on Tuesday to attract consumers, hoping for a more positive outcome in the following weeks compared to the 20 percent drop in revenues on average estimated for 2010.

The winter sales season officially starts on January 15 in Greece, but unofficially it opened on Tuesday. By the end, in February, many shop owners will have made their decision whether to follow in the steps of more than 40, 000 businessmen who closed their shops in 2010.

"The retail sector is in a dramatic situation. The previous year was exceptionally difficult for entrepreneurs, households and the national economy. Now we all anticipate the sales," said ATA Vice President Nikos Giannetos.

The average Greek consumer seems hesitant to spend amidst an acute economic crisis, cutbacks on salaries, wages and tax hikes that decreased purchasing power in 2010 and uncertainty about the future.

According to the official three- year Stability and Growth program of the Greek government and backed up by the European Union and the International Monetary Fund (IMF), Greece faces one more year of recession before returning to growth and exit the crisis which has hit hard the country since late 2009.

According to the latest data of the Greek National Statistics Agency and the Greek National Confederation of Commerce (ESEE), turnover dropped by more than 50 percent in the clothing sector in 2010.

In the fuel market turnover declined by 28 percent, in medicines and cosmetics by 27 percent, by 15 percent in furniture and electrical appliances, 14 percent in alcohol and tobacco, and 11 percent in food.

Over the past two years Greek shop owners reported losses up to 7.5 billion euros (10.06 billion U.S. dollars).

Local analysts expect that the figure will increase, as since January 1 this year Greek citizens face increased prices in food, public transport, tobacco products, entertainment, electricity and natural gas bills, due to a VAT rate raise from 11 to 13 percent.

The Greek socialist government introduced the tax hike in the framework of austerity policies and structural reforms aiming to slash a budget deficit that stood at 15.4 percent in late 2009 and at 9.4 percent in late 2010.

Athens has won high remarks for a good start in the implementation of the program by EU-IMF auditors, but still misses targets in revenues collection.

According to Greek Finance Ministry officials, budget revenues increased by 5.4 percent in 2010 to 51.1 billion euros, compared to 2009. The initial target set by the Greek government was six percent for 2010 or 51.39 billion euros.

The gap is attributed to a shortfall in tax collection, which is expected to be addressed through stricter measures for tax evasion promoted this year.

Source: Xinhua


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