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Victoria Mindova

The beginning of the year 2010 will remain in the history as the black winter for the small businesses in Greece. Once again at the end of February ended all the winter discounts in the shops and the balance is bitter. The low turnover and the lack of liquidity on the market forced many family businesses to close down. While the official data do show a great difference for the small companies. The owners of shops who survived until the moment are forced to continue with the discounts in march as well. Lowering the prices and the announcing of different promotions is their only hope to provide some income while the crisis goes away and the normal rhythm of the market is restored.

Most affected by the financial hysteria in Greece are the hundreds of little shops and private commercial sites which did not make it through the sudden shrinking of the market went into bankruptcy during the winter season of 2009 – 2010. This crises affected directly also many importers and wholesalers. Generally under the domino principle after the bankruptcy of the small shops many of the orders made for the winter season six months in advance remained “hanging in the air”. In this way the importers seemed to have goods, but no money because their clients are no longer on the market. Another familiar problem turned out to be the frauds who pay using empty cheques. They reached their peak on the Greek market in 2009 with an amount exceeding 3,5 billion euro. This blocked even more the liquidity of the traders who were forced to sell the stagnant goods at lower than the normal prices so that they do not go into bankruptcy as well.

At the same time the big chain stores changed their sales strategy. They broadened the range of the offered brands, however the collections are changed more often and come into small quantities. They prefer more fast moving consumer goods at lower prices, which however are not seasonal and are current throughout the entire year like jeans and shirts with prints for example. The big commercials chains for clothing (H&M, Zara, Breshka etc.) are also producers which allows them to lower to the minimum the value of each product they are producing. Regardless of the fact that these chains at first sight are lowering the prices of the goods they offer and their profit hasn’t dropped because they have decreased the production value of the products they offer and have increased the rate of sales. This provides them the fast turnover and the possibility to keep the levels of profit compared to the previous years. 

Another measure which the managers of the big commercial sites have undertaken for the preservation of the profits is the decrease of the operational costs. Examples for this are the so called legal cuts. The staff in the big stores are mainly young people with temporary contracts and big trial period (between three and six months). At the expiration of the contract it is not being renewed and in this way funds are being saved from the payment of salaries and insurances. “When I started work in the store about a year and a half ago we were working ten girls on each floor,” says a girl floor manager of a store which is part of a popular chain, “now we are only three however we do the same job without having an increase of the salaries.”

Most of the traders expect that the market will start “loosing up” in the beginning of October this year. In the country there will be more clear icon for the economic measures which Greece has to offer on the way to financial rehabilitation. The consumers will be able to plan their expenses and the demand will be increased. “Until then we have to clench our teeth,” says the owner of a little clothes shop in the center of Athens.