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A snapshot of the Greek economy
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Drop ‘til you shop
It seems slightly surreal to be discussing whether shops in Greece should open on Sunday when household disposable income has dropped by around 30 percent since 2010 and we have seen the emergence of consumers of need rather than choice. Nevertheless, this is the debate that has been prompted by a new law allowing stores in 10 areas of Greece to open every Sunday.
Unions representing store owners and workers are opposed to the measure. The two groups come at the subject from different angles. The owners say that opening on Sunday creates an extra expense (salaries, electricity, etc) that is not justified by any extra sales they make. Employees argue that they are not paid properly and that they lose their day off. There is also a political dimension (the opposition parties are against Sunday opening) but let’s leave that aside.
The argument behind Sunday opening, as put forward in other countries where the measure has been in place for much longer, is that businesses and the national economy benefit from the extra trade. Stores, for instance, hire extra staff to cater for customers and this has a positive knock-on effect. Apart from that, it is only logical that as the nature of the sector changes over the years, so retail outlets should adapt to consumer’s demands.
In practice, though, the Greek experience appears to be different. Only 6 percent of 227 retail stores in Athens and Thessaloniki surveyed by the National Confederation of Greek Commerce (ESEE) described Sunday opening as “very effective,” whereas 75 percent said it was “totally ineffective.” The reality is that most Greeks simply do not have enough money to shop anything other than pretty much the basics at the moment. For them, the 55.5 hours most stores are open during the other days of the week suffice. There is a reason, after all, that the retail sector has plummeted during the crisis, only producing its first positive year-on-year turnover reading this April, after almost four years.
In the ESEE survey, 64 percent of owners said their operational costs rise as a result of Sunday opening – an expense that for many is not covered by what they will sell. Even more emphatically, 95 of retail businesses said they do not hire any extra staff to work on Sundays. This seems to back up the fears of the employees’ union about existing staff being asked to carry the extra burden. This then creates another question about whether they are compensated properly.
There is, though, an argument to be made for using Sunday shopping to create more movement in the market. It doesn’t have to be just about people buying clothes or other goods, it can be about making the city centre or neighbourhoods magnets for consumers who end up spending their money on food or drink instead. This is one of the positive knock-on effects when Greek stores extend their trading hours at Christmas and Easter. The White Nights initiative that the City of Athens ran in conjunction with shops in the city centre last year also seemed successful, with many Athenians simply enjoying the live music and performances that had been organised on those days. Shops in tourist areas also benefit from being able to open all the week around, making the most of custom when it is there.
There is evidence to suggest that the idea of building more flexibility into the retail sector is worth examining but this crashes against the rather bleak reality that shop owners are conveying. Perhaps there needs to be more of a concerted effort to make this less about consumer spending and more about reviving city centres and shopping districts.
Also, if there is to be a positive knock-on effect for employment, Greece needs to think about how it can incentivise or force retail businesses, as Cyprus has done, to hire unemployed workers to cover the extra hours. It certainly has to ensure that existing employees are paid properly for working on Sundays if the scheme is to be anything other than a cheap stunt for owners to pocket a few extra euros and the government to be seen to continue its liberalisation crusade. It was noticeable this week that Deputy Development Minister Gerasimos Giakoumatos threatened inspections and fines for bakers who do not weigh fresh bread (a new requirement) when there has not been a peep from the government about ensuring workers are treated fairly by businesses opening on Sunday.
There is, however, another fundamental problem underlying all this. If we accept that one of the failings that led us into the crisis was the creation of a consumption-dominated economy that was utterly reliant on imports, then we have to question what has been done to change this.
So, we have to ask what has been done or is being done to ensure that this won’t happen. Have Greek companies, for instance, started producing import substitutes? Have we shifted away from a business model based around selling other people’s products rather than producing our own? If there isn’t an effort to tend to these issues then Sunday opening just seems to be an attempt to give Greeks an extra day on which to fritter away hard-earned cash just to damage the current account balance. This doesn’t sound like much of a strategy.