Saturday,23 February, 2019
Current issue | Issue 1428, (31 January - 6 February 2019)
Saturday,23 February, 2019
Issue 1428, (31 January - 6 February 2019)

Ahram Weekly

Searching for bargains

Mai Samih talks to customers and shop owners about this year’s winter sales

 

Tough economic conditions limited demand in the winter sale season
Tough economic conditions limited demand in the winter sale season

The winter sales started two weeks ago and shops that had few, if any, customers, are now seeing increased footfall. Outlets selling imported clothing have in some cases cut prices by 50 per cent, while those selling locally made garments have reduced prices by an average of 30 per cent.

Shaimaa Abdel-Kader has gone clothes shopping in Downtown Cairo for herself and her children during the sales for several years now. She scouts for bargains and looks ahead, buying her children the clothes they will need over the next 12 months at reduced prices. All too often, though, she finds exactly what she wants but it is in the wrong size.

A student shopping in Giza has the same problem. “I just wish all sizes could be available during the sales,” she says.

Sales started earlier than usual this year as retailers attempted to make up the reduced turnover reported throughout the rest of the year.

People have less money to spend than before, says Downtown shop owner Mohamed Amir. Normally, he would see a 50 per cent increase in turnover when a new season sets in as people scramble to buy suitable clothes. And in the past, says Amin, his customers would often opt for imported items, believing them to be more durable. 

 Now, though, most of Amin’s stock is locally made, because it is cheaper. And his customers tend to buy understated, classic styles, since they do not become outdated.

People’s purchasing power has fallen, says Giza shop owner Gamal Abdallah. New clothes have become a luxury for many families struggling to pay for food and educate their children. His customers now seek out the cheapest items, he says, and many have turned to buying second-hand clothes.

While in the past he would sell 10 pairs of trousers a day now he sells only one pair. And his sales have not increased significantly now the prices in his shop are heavily discounted. Abdallah says he has cut his own profit margin to the extent that he is simply paying his bills and covering running costs. He is not sure how long the shop will be able to stay open.

This has been going on since 2016, commented Mohamed Abdel-Salam, head of the ready-made garments division at the Federation of Egyptian Industries. He says the problems began in 2016 when Egypt embarked on a series of economic reforms that led to a hike in prices. The measures taken included cutting fuel subsidies, floating the Egyptian pound and imposing a value-added tax.

The cost of fuel, electricity, the wages of workers and the materials needed for manufacturing clothes almost doubled after the floatation of the Egyptian pound, says Abdel-Salam, and the price of finished garments increased by 40 per cent on average.

“Someone who used to buy three new items of clothing now only buys one. Retailers have no control over the price they must pay from the manufacturers, and both the retailers and factories are suffering,” he says.

Ayman Hossameddin, an advisor to the minister of supply and internal trade, says this year’s sales have made a difference in terms of activating the market, but demand remains low as families continue to spend only on absolute essentials.

“But at least merchants have been able to regain some capital,” notes Hossameddin, “even if profit margins have been slashed.”

“They are simply transforming goods into cash in order to continue working.”
Sales began on 14 January and are scheduled to run until 14 February. It could, however, be extended upon the request of the Chamber of Commerce, says Hossameddin.

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