Shops in the central streets of the Georgian capital are closed one after the other – 10 stores have closed only in one of the shopping streets since November 2014.
What is the reason for closing retail facilities and whether a trade sector is on the verge of bankruptcy?
Owners of clothing stores say they don’t remember such as low demand.
“We have been working in this system for a long time. Business situation is deteriorating every day. GEL devaluation played a very negative role. Almost throughout the city shops either close or announce sales. We are trying to keep our customers, reduce prices, but purchasing power is still reducing, “- they say.
According to the expert Emzar Jgerenaia, devaluation of the national currency became the main cause of the crisis in the busines.
Economy experiences a difficult period. Perhaps in 2014, several successful investment projects were carried out, but in general, the volume of trade declined, the decline recorded in the segment of expensive and cheap products. Sales especially decreased in areas such as household goods, appliances, clothing, in short, everything that can be postponed. Basically, the population spends money on food and bank loans, “- he says.
According to the ex-president of the National Bank of Georgia Roman Gotsiridze, the current situation in the consumer field is similar to what happened in 2008-2009.
Consumers say they less use services of shops, and mostly buy products online as prices are lower there, and in conditions of a devaluation of the national currency and the loss of purchasing power of the population – price is a very important factor. In this situation, store owners cannot pay for expensive leased premises.
There is no precise, statistically valid explanation of why retailers are closing commercial properties in Tbilisi center, but what is visible to the naked eye are the shop windows where the ads are placed on the delivery of commercial space for rent.