Sunday, 23 January, 2022

50,000 businesses threatened with closure in the coming months


One in seven specialized stores could close in the coming months. This is the terrible observation delivered by Procos, the professional federation of specialized trade, on Tuesday, June 30, with the help of the EY cabinet. Thus, the crisis facing the various brands would lead to the disappearance of 50,000 points of sale and the disappearance of 150,000 to 300,000 jobs in the next eighteen months. According to its president, Laurence Paganini, also managing director of the Kaporal chain, there is a real risk of collapse for this sector which represents 8% of private employment in France and 12% of GDP even though Bercy has announced this Monday measures in favor of small businesses.

This cry of alarm comes as household consumption has been slow to pick up since the end of confinement, especially in physical stores. In June, it is still down 20% for personal equipment and 35% for catering.

And if home, sport and leisure returned to the green this month, in the first half of the year, all of these categories posted lower sales. The explosion of e-commerce did not make it possible to compensate for the shock of confinement.

Telework and absence of tourists affect commerce

The city centers of large metropolises are particularly affected. “In Paris, this dropout is explained by the continuation of teleworking and slow-moving public transport,” said Emmanuel Le Roch, general delegate of Procos. The absence of international tourists and the anxiety of the French about the economic situation also weigh on purchasing behavior. “The sector is embarked on an unprecedented transformation”, estimates Laurence Paganini. This will notably involve adjusting the number of stores and improving the customer experience. Omnichannel, which combines distance and online sales, and sustainability, which aims for a more responsible offer, are the two pillars of this ongoing revolution.

Read alsoWill the French consume more organic, local, responsible after the coronavirus crisis?

But the margins literally melted in a few months. “The covid crisis was a very violent shock. Today, more than two-thirds of brands in clothing have an ebitda of less than 2% and three-quarters in restaurants, says Olivier Macard, partner at EY, in charge of trade and consumption. At this level, the company is almost doomed. ” Far too little to fund the necessary investments in technology and logistics. The specialized trade federation therefore suggests the extension of tax and social exemptions, a two-year moratorium on the repayment of state guaranteed loans – there have been 190,000 granted in this sector for 32 billion euros – and the elimination production taxes, including local taxes. Not to mention the abandonment of rents during confinement.

A pot of 75 billion to boost consumption

In addition, according to Procos, there is a pot on which everyone is eyeing. This money set aside by the French during confinement which represents a dormant nest egg of 75 billion euros. To encourage consumers to warm up their credit cards, the federation of traders suggests the release of PELs and participation plans before expiry, the creation of “solidarity trade checks” for an arrow relaunch and a national communication campaign. Not defeatist, Laurence Paganini believes that “this period is a chance for France to support the transformation of this sector which employs 1.5 million people”, not to mention indirect jobs in design, logistics, advertising. A reinvention that will have to be done in accelerated mode.

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