Crisis? What Crisis?

In Uncategorized on 12/20/2008 at 01:19

Though there may be fewer Christmas gifts under the tree this year in the rest of the world, the city’s retailers say they haven’t felt the effects of the global slump.

If you were in Belgrade last year during December, you may remember how crowded the city’s shops and malls were when the pre-New Year sales started. This year, though many stores have started their sales already, the shopping districts and malls seem nowhere near as packed and the shopping hysteria we saw during the 2007 holiday season seems to be missing.

Whilst retailers across the world seem to be in meltdown, predicting some of the worst Christmas sales in decades, Belgrade analysts and retailers say that there hasn’t been much change in sales volume when compared to last year, adding that the global financial slump hasn’t yet affected Belgraders’ spending.

In the US, despite heavy discounts and limited-time deals on goods, the average holiday shopper has bought much less than last year, according to a survey by the country’s National Retail Federation which showed that over 47 per cent of shoppers had not yet finished their gift shopping by the second week of December. A massive 41 million people haven’t yet started shopping. Moreover, according to another survey published by America’s Research Group and UBS, over 40 per cent of shoppers say they will spend less this year.

The situation is much the same in the UK, where iconic brands such as Woolworths have slipped into receivership and retailers have been frantically scrambling to re-negotiate lease contracts and payment terms. According to a Confederation of British Industry survey, 67 per cent of retailers reported lower sales in the first two weeks of December, compared to the same period last year.

But, it seems that shoppers will keep buying in Belgrade for the time being. Bosko Trmcic, of Serbia’s Ministry for Statistics, said that he expects consumption to plummet much later than it has in the rest of the world. Though discretionary spending statistics for November and December haven’t yet been published, he added that he doesn’t expect to see change much from this time last year.

“We are expecting a slight fall in consumption in November, but the financial crisis hasn’t affected the country yet as it has the European Union,” Trmic said.

“This fall happened in the EU over two months ago, and I’m not sure when it will happen in Serbia. It will, just not yet,” he added.

Trmic said that November discretionary spending is nearly always smaller than that of October, and he expects that the numbers this year will be slightly lower, but not significantly.

In 2007, 22 per cent of Serbian household income was spent on discretionary goods. By the third quarter of 2008, discretionary had nudged ahead by .5 to 22.5 per cent.

Retailers agree with analysts that the financial crisis hasn’t affected holiday shopping.

“Currently we don’t have any pre-New Year discounts, but nevertheless, we haven’t felt that shoppers are spending any less than they were spending last year,” said Lidija Pintic, manager of Mango at Delta City.

Jelena Bukazic, manager of the Esprit store in Delta City, echoed Pintic, saying “We have started to discount because we do this every year and not because of the financial crisis. There really hasn’t been a change and people are spending as much as they do every year during this time.”

  1. […] the simple fact: while Europe and the USA may be in trouble, Serbia is actually doing quite well (Crisis? What Crisis?). Just a few weeks ago, there’s been a bit of a discussion going on around a recent survey […]

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