12° Nicosia,
19 June, 2024

Cyprus retail sector continues climb despite inflation

Credit card purchases increased in almost all categories in the first 11 months of 2022, indicating optimism for better times and the Christmas season

Maria Eracleous

Maria Eracleous

Black Friday, with its high levels of traffic and shopping, appears to have given way to the Christmas holiday season. The market is still moving well, with increased foot traffic in shopping malls and main streets. A comparison is made with the same period last year, when market activity was numb, at least until the 21st of December, owing largely to the deterioration of the epidemiological picture and the resulting tightening of measures in the catering sector. Of course, there is inflation this year. Despite the official inflationary pressures across all products, particularly in food retailing, the market appears to be moving, continuing the positive streak of September, October, and November.  The market flow is expected to peak in the coming days, with the retail sector ending 2022 on a high note. JCC data, which records credit card turnover levels in various retail categories up to the end of November, provides a more indicative picture.

Over 2 billion

According to JCC data, credit card purchases in the categories of Electronics, Home Appliances, DIY, Furniture, and Clothing and Footwear totaled €1 billion from January to the end of November. (956.12 million), compared to 791 million in the same period last year. The total turnover in the aforementioned categories is up by 20% compared to the previous year's eleven months.  More specifically, up to November, purchases in the Electronics category (technology products, gadgets, etc.) totaled €125.732 million, a 16.94% increase over €107.517 million. Purchases in November alone totaled €17, 508 million this year, up from €13, 597 million the previous year, representing a 28.76% increase. This increase can be attributed to this year's Black Friday. Similarly, turnover from household appliance purchases increased to €92.711 million from €80.840 million last year (+14.68%), while the increase for November was lower, amounting to just plus 2.59% from €12.669 million to €12.349 million last year. The furniture industry saw the greatest increase, with a +30% increase in eleven-month turnover from €89 million last year to €115, 686 million this year.  Turnover increased by 40% (€14, 781 million versus €10, 565 million) in November alone, owing primarily to Black Friday sales. DIY saw a 22.19% increase from January to November (€192 million this year versus €157 million last year), with only November showing a 22.19% increase. Clothing and footwear saw an increase as well, albeit at a slower pace. In particular, revenue for the first 11 months of 2022 was €430 million, up from €357 million the previous year. In November alone, turnover was €46.211 million, up from €41.297 million in 2021 (+11.9%).

The furniture industry saw the highest growth, with a +30% increase in purchase value over the previous 11 months and a +40% increase in November alone.

In any case, the majority of purchases are concentrated in food retail. In particular, the value of purchases in the Hypermarkets category was €1.14 billion, up 13.55 percent from €1.08 billion in the same period last year. In November alone, the value of card purchases was €109 million, up from €88 million the previous year (+23.88%). The conclusion that increased plastic money turnover is solely due to more purchases is somewhat arbitrary, as it could be the result of a larger share of consumers shifting from cash payments to card payments, as well as increased prices due to inflation. However, according to recent calculations, 72% of commercial transactions are made with cards rather than cash.  Furthermore, November's increased credit card sales correlate with an increase in market foot traffic, both compared to last year, reaching - in some cases - 2019 levels.

December festivities

In his statements, Nicosia Mall CEO George Georgiou stated that the market will move satisfactorily in December in all provinces, with city malls taking the lead. Satisfactorily, the Makarios market will also move, despite the almost universal market assessment that the shopping street will be slow to reach targets and regain 100% of its position on the capital's commercial map.  The market's optimism lasts as long as the holiday season. Following the end of the holidays and sales, but also the rising cost of payments, energy, and broader market inflation, it is clear that the consumer's purchasing power margins are tightening. Historically, February and March are difficult months for retailers, and it is expected that market resilience will be tested during this time.

[This article was first published in Kathimerini's Oikonomiki edition and translated from its Greek original]

Cyprus  |  economy  |  inflation

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