ATHENS, Dec 15 (Reuters) - Riots in Greece sparked by the police shooting of a teenager last week will cost retailers about 1.2 billion euros ($1.62 billion) in lost sales, the head of their association said on Monday.
Hundreds of shops were damaged by rioting youths with the violent protests hurting the mood of shoppers, making things worse for the country’s retail sector which is also affected by the world economic downturn.
The sector, which has annual sales of about 14 billion euros or 5 percent of Greece’s gross domestic product, is likely to take a hit this year as consumers tighten their belts.
“We estimate the unrest will continue for another seven days and could cost Greek retailers foregone sales which could reach 1.5 billion euros,” Theodoros Vardas, head of Greece’s retailers association (SELPE) told Reuters.
“The state will lose about 20 percent of this amount from value added tax (VAT), while Greek retailers will lose the remaining 1.2 billion,” he said.
Vardas said business in the centre of Athens was down sharply, while shops around the centre were also hit, recording a 50 percent sales drop.
“Athens accounts for about 60-70 percent of total annual revenues, so we’re talking about a drop of 800-900 million euros in sales,” he said. “There is a widespread fear due to the unrest in Greece which added to the financial crisis.”
Last week the government pledged financial compensation for shopkeepers affected by the unrest, along with tax breaks and loan assistance.
Anti-government protests are continuing for a second week but the intensity of the demonstrations has tailed off. Retailers hope the mood will improve ahead of a traditionally busy Christmas season.
“There is no doubt that as we get closer to Christmas consumer sentiment improves,” said Antonis Petalas, chief executive of Fourlis (FRLr.AT), the Greek franchise of Swedish furnishing group IKEA.
“We have seen this trend in recent years and expect it this year as well but not in the same scale due to the current crisis,” Petalas added.
Sales starting in mid-January were also expected to bring consumers into shops next year but a turnaround was not seen before July.
“There is a feeling people will start buying during sales. Sales will boost business,” Vardas said. But he did not see a recovery in the sector until after the first half of 2009. (Editing by Jon Loades-Carter) (email@example.com; +30 210 3376436; Reuters Messaging: firstname.lastname@example.org)) ($1=.7426 Euro)