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CHAMPION OF THE DAY
Increases in hospitality,
retail, and manufacturing
Sales have plateaued at low levels in 2021 and are recording a better performance this year especially in the retail, hospitality, and industrial sectors, according to ‘Improvement in sales this year’, an article published in the autumn issue of Lebanon Opportunities magazine.
Easing the Covid-19 restrictions in 2021 ought to have produced a significant rebound in business activity as has happened globally, but the worsening crises prevented a recovery. The pace of the decline in sales (in fresh dollars), however, slowed down in 2021 thanks to the waning impact of the pandemic and since sales have already hit a bottom by plummeting by an average of 80 percent in 2020. Almost two thirds of businesses surveyed by InfoPro Research stated that the level of their 2021 sales, in terms of value, remained unchanged compared with the previous year. The InfoPro Research survey was conducted in June-July 2022 with 100 firms in various sectors in Greater Beirut.
In the first nine months of 2022, especially during summer, retail sales significantly improved compared with the same period of 2021 as the stability at the level of security has attracted visitors to the country this summer, according to Mohamed Choucair, Chairman of the Lebanese Economic Organizations. He said that despite this recovery, the value of sales in terms of fresh dollars has not yet reached half of its pre-crisis levels in 2018.
Jacques Sarraf, Chairman of Malia Holding that includes cosmetics and pharmaceutical manufacturing companies, said that sales of consumer products are increasing as well as the sales of the industrial sector including drug manufacturers who are also raising their local sales to offset the sharp decline in medicine imports. According to Sarraf, who is also former Chairman of the Association of Industrialists, the industrial sector is endeavoring to cope with growing domestic demand and its local market share has expanded despite competition from Arab countries.
The hospitality sector witnessed a relatively significant improvement last year compared with 2020 which was an exceptional year due to the Covid-19 lockdowns and travel restrictions, according to Pierre Achkar, Chairman of the Syndicate of Tourism Organizations. He said the revenues of hotels increased ten percent on average this year compared with 2021 and that the growth was mainly driven by a jump in the number of expat visitors. “It is true that hotel occupancy increased during the weekends compared with last year but it has decreased during the rest of the week,” Achkar said.
According to Choucair, many companies heavily rely on their December sales which usually represent a huge chunk of their annual turnover that could in some sectors reach as high as 40 percent. Sarraf said that exports usually perform better in the second half of the year. Overseas sales are growing despite the ban by Saudi Arabia which is a large market, he said.
In parallel to rising sales revenues, expenses are increasing as well. Utility costs are escalating with the surge in fuel prices and as many businesses suffer from an insufficient tap water supply and have to buy water from other sources. Overloading generators, due to an almost complete blackout of the State's electricity, is also increasing maintenance costs.
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Sep 26, 2022
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