EuroCommerce, the umbrella organization of all European retailers and wholesalers, made an urgent appeal for measures that can help the trade in the current serious economic crisis that the sector is currently experiencing.
At its last meeting, the president of EuroCommerce, Juan Manuel Morales of Spain, said that the challenges are enormous. “On our Board of Directors, we have reflected on the enormous challenges our industry faces in connection with spiraling energy costs and inflation. Many of EuroCommerce’s partners have pointed out that this situation is no longer sustainable. If urgent action is not taken to tackle the high cost of energy, a large and growing number of retail and wholesale businesses are at real risk of disappearing and many shopping areas in Europe may be left without their stores.”added the manager.
The organization concluded that the European retail and wholesale trade needed a European solution to the current energy price situation and it must be taken as a matter of urgency. He points out that this sector is a major consumer of energy, with very low profit margins (between 1 and 3% in the food trade). “This makes companies particularly vulnerable to the rising cost of energy; a cost that they cannot pass on to consumers already hard hit by the economic situation. “The continued need for our sector to provide an essential service to the population means that companies cannot temporarily halt or restrict their activities while they wait for energy prices to fall”. Morales reiterated.
However, EuroCommerce notes that wholesale and retail distribution is working to soften the impact on consumers by acting responsibly during this crisis. “Businesses have made the maximum effort to absorb as much as possible the inflationary pressure they and consumers are facing. This means that consumer prices have increased less than producer and importer prices.”
Nevertheless, many supply chains are exploding due to economic costs, which already account for 40% of inflation and are rising steadily. If governments do not take action, the energy crisis will become increasingly catastrophic and the extra costs will be passed on to consumers.
“A worrying and growing number of businesses are at risk if immediate action is not taken to reduce energy costs. Many stores were hit by the Covid pandemic, and the consequent closure, and empty spaces are still being seen on shopping streets. These closures will continue and grow if nothing is done to prevent it.” the European employers’ association.
Retail and wholesale business is the private sector that generates the most employment. “It is the only one that operates in all areas of Europe; it would be hard to lose stores and it would affect urban centers and rural communities alike. The sector depends on retail distribution to get its products to market, and the economy would be affected if there were none. The current situation does not help at a time of low growth, high inflation and low consumer confidence,” concluded the EuroCommerce president.
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