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Coronavirus crisis poses major threat to survival of local stores

Experts say crisis will cause many shops to close down, but also offers "opportunity" to make needed changes like adapting to online sales

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27 March 2020 01:07 PM

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ACN | Barcelona

From tourism to industry, the coronavirus crisis has hit business in Catalonia across the board. However, one sector that is least prepared to weather the storm is local retail.

Experts predict that the covid-19 restrictions will lead many local stores to close down, with those that sell food being the ones with the best chance of escaping that fate.

Another consequence of the health crisis is that it has exposed the small retail sector's shortcomings in adapting to new habits and forms of consumption.

One retail expert, Jordi Mas, points out that some retailers selling online and providing home delivery have raised their turnover during the crisis, but that plenty more have not.

"If they'd adapted [to e-commerce], they could have turned the situation into an opportunity," says Mas of those many stores that have not taken the plunge into online sales.  

In fact, the expert suggests that if there is one positive that might come out of this "extreme" situation, it is that retailers will be forced to update the way they do business.

"How can it be that we're not already going digital?" exclaims Mas, who insists that the health crisis will end up forcing the sector to reinvent itself.

"There has been progress," says retailer's association

While accepting shortcomings, PIMEComerç, which represents local shops, says "there has been a lot of progress," especially in the food retail sector, and they say it is "a priority."

The Catalan government also sees digital transformation as a key objective and says the businesses that have not begun the process "have more difficulties" in facing the crisis. 

The Pimec business association head, Josep González, admits that the crisis has increased "the trend in ordering online," but also insists that local shops must be protected. 

"We cannot allow the loss of local retail, as all of us will regret it. I ask people to continue going once or twice a week to their local store," he says.

Another potentially positive aspect to come out of the crisis over the long run, suggest some experts, could be the "humanization" of small retail.

Mas says consumers who shop online might learn to better appreciate the experience of going to a store: "There's someone there to serve you, a human relationship."

Skepticism about help offered by Madrid

Yet right now, local stores are suffering due to the emergency restrictions, and PIMEComerç says "the Spanish government has done nothing to financially help small retail."

Nor are shopowners impressed, accusing the measures passed by Madrid of being a "fallacy," in the words of Ines Barroso, who owns the 8PM store in Barcelona.

Barroso says applying for aid "is not as easy as it seems" because the authorities ask for "a great deal of documentation," while the system is "completely saturated."

Yet, Mas insists that he is optimistic about the long-term future of small retail, and repeats his call to take advantage of the current health crisis in order to introduce changes.

Among his proposals is introducing variable rents according to turnover, and setting up co-working retail spaces, "where different sectors can coexist in a collaborative way."

 

 

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  • Potatoes and onions for sale in a shop in Barcelona's Sant Antoni district, October 2018, (by Andrea Zamorano)

  • Potatoes and onions for sale in a shop in Barcelona's Sant Antoni district, October 2018, (by Andrea Zamorano)

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