Lebanon Businessnews News

Retail ends 2015
on a slump
Positive results in sports, F&B, and health
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The Beirut Traders Association (BTA)-Fransabank Retail Index posted negative results for the fourth quarter of 2015, scoring 55.5 out of 100, falling by almost five percent, compared to the same period in 2014.

Nabil Hatem, General Director of the BTA, said: “The main reason behind the fall in retail activity is that the market is still in a deflationary mode, where prices have gone down.” The decline in prices was not met by an increase in consumption.

The index, prepared and published by the BTA and Fransabank, measures quarterly variations in the purchase value of goods in retail outlets. The baseline of the index is 100, as of the fourth quarter of 2011.

The traders’ consolidated turnover, taking inflation into consideration, dropped by only one percent. “The drop in purchase activity did not only hit the luxury market, but extended to basic commodities,” Hatem said. The weak purchasing power, coupled by rising unemployment, as Syrians accepting low salaries are replacing locals, continue to have an impact on market activity.

The index shows a sharp reduction in the consumption of personal goods such as shoes, watches, and clothes. Nicolas Chammas, Chairman of the BTA, said: “Consumer confidence is low in various sectors.” Consumer purchasing activity was good for only ten days before Christmas and then fell before the New Year, he said. Therese Khairallah, General Manager of IDM, said: “Internet prices fell when the Ministry of Telecom announced new, less expensive packages.” Internet Service Providers (ISPs) are offering plans that are even less expensive. “Since the packages were announced, consumption has increased by two and a half times,” she said.

The following sectors have witnessed a decline in activity:

SectorPercentage change (Q4 2015 compared to Q4 2014)
Building equipment and automation materials
Bakeries, chocolates, and sweets
Furniture and decoration
Shoes and leather products
Home accessories
Watches and jewelry
Tobacco products
Cosmetics and perfumes
Alcoholic beverages

Source: BTA-Fransabank Retail Index

Turnover improvements were noted in the following sectors:

SectorPercentage change (Q4 2015 compared to Q4 2014)
Sports equipment and sportswear
Restaurants and snack bars
Medical equipment
Optical instruments
Toys and games
Pharmaceutical products

Source: BTA-Fransabank Retail Index

An improvement is seen in the activity of all sectors related to personal leisure, as well as in the toys sector. Ibrahim Berro, Product Manager of Home Appliances at Abed Tahan, said: “Sales of sports wearable technology and sports equipment that could be fitted at home has increased by ten percent in Q4 2015 compared to the same period of last year.” Buyers are now heading towards ‘entry’ brands that are made in China and Taiwan, moving away from high-end brands. “Customers are paying in cash, as the highest bill for equipment reaches $650.”

Sales at supermarkets and in the food sector remained stagnant. This stability comes in spite of the continuing influx of Syrian refugees. Chammas said: “Humanitarian agencies still rely on foreign sources to purchase goods and basic commodities instead of resorting to the local market.”
Reported by Yassmine Alieh
Date Posted: Mar 03, 2016
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