3Things in Retail: Duty free down, Black Friday up, and new Covid compensation

Robert McLean

#cee, #proptech, #development a #architecture

Anyone who managed to fly somewhere while it was still possible will have noticed the lack of lines at Prague’s airport’s duty free shops. They’re run by Lagardere Duty Free, which had the misfortune of taking on a new lease in 2019. But while things are slow now, its 2021 results are unlikely to be as catastrophic as the CZK 161 million loss it made in 2020. That was quite the change in fortune from 2019, which ended with a CZK 101 million profit on sales of CZK 2 billion. Sales for 2020 sagged to a paltry CZK 454 million as traveler stats tanked from 18 million to just 3.7 million. Lagardere Duty Free reconstructed all of its stores in 2020 at a cost of CZK 240 million. Richard Prochazka (Lagardère Travel Retail) told SeznamZpravy he expects 8 million passengers at Prague’s airport in 2022 and 12 million in 2023. He also told the news server that his company wouldn’t have survived if he hadn’t managed to negotiate new rental terms. “Without that we couldn’t have continued to operate,” he said. “The rental terms were extremely tough. They were based on 17 million to 18 million passengers per year.”

Meanwhile, on the ground, shop owners are bracing for the Black Friday rush. This year, there’s every reason to expect sales to be brisk, since a) people are worried stores will run out of goods long before Christmas and b) fears of a lockdown will have been stoked by today’s new daily record for new Covid-19 infections (25,000 people). But even e-shops are feeling the bulge. Shoptet, which manages over 28,000 e-shops, expects sales to hit CZK 4 billion for the period, with toys, electronics and computer games topping most wish lists. Hoping to drive sales, most retailers are extending Black Friday to include the entire weekend. Last year at this time, shops were still closed as part of the second lockdown. CBRE’s Pavel Urban told the Czech News Agency that sales are the primary attraction for shoppers this year. “We’ve been told repeatedly by the authorities that there won’t be any new lockdown of stores, so the motivation for people will be the sales themselves and the need to buy as cheaply as possible, in part because of the rise of inflation and the constant medialization of rising prices.” (Let’s see who else starts playing the media card…)

But while Czechs haven’t gone down the lockdown path (yet), unvaccinated people have been stripped of their right to join the crowds of shoppers. This can be expected to result in a new drop in retail revenues for stores, restaurants and hotels. As a result, the state is ramping up its Covid-19 compensation machinery, promising support for businesses who suffer a fall in turnover of at least 30 percent beginning November 22. Outgoing Minister of Trade and Industry Karel Havlíček said that the level of support will be lower than before, when it set the minimum drop in turnover needed to qualify at 50%.

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