The study focuses on growth opportunities in 5 major ‘production sectors’ which are already of prime importance to the Greek economy and on 8 ‘rising stars’, i. e. new sectors where present activity is still small but where significant potential can be expected. In this post, I will focus on the ‘production sector’ of retail & wholesale (page 55 in the executive summary).
Production Sector – Retail & Wholesale
This is the last post in this series and good things come last. GTYA states that the Greek retail & wholesale sector is the largest sector in the Greek economy accounting for 19% of gross vallue added (GVA) and 18% of employment. Moreover, it is one of the most dynamic sectors, having grown more than double the rate of the economy as a whole. There is significant room for improvement as evidenced by the fact that productivity lags by 30-40% behind EU-averages (GVA per hour and square meter). GTYA makes the following observations in this regard:
– poor format mix (almost double the number of stores compared to EU-averages)
– limited usage of innovative IT and supply chain management solutions
– lower scale, driven by heavy category specialization and lower levels of sophistication in terms of inventory management, customer service level and warehouse management
– high suppliers’ concentration; lower penetration of private label products; lower penetration of discounters — all leading to lower competition
GTYA proposes 10 measures to improve the situation, grouped into two categories:
* further reinforcing competition, investments and compliance with regulatory requirements: define ‘commercial zones’ in urban and suburban areas to facilitate and accelerate growth in retail and wholesale investments; lift constraints on the currently restricted product categories; increase price transparency; extend informality controls; improve Competition Committee’s ability to secure fair competition
* boosting retailers’ and wholesalers’ productivity: expand scale of current retailers’ operations; pursue targeted investments in IT, logistics and e-commerce; eliminate remaining retail-related labor rigidities; accelerate full liberalization of the public transport market; simplify unnecessary retailer-specific reporting and regulatory compliance requirements
For details, please refer to the GTYA-report.