Retail trade down

BTA-Fransabank Index reflects
lower consumption rates

The retail trade activity continued to witness a slowdown during the fourth quarter of 2012. The BTA-Fransabank Retail Index for Q4 2012 showed that the sector’s activity fell by 12.3 percent year-on-year. “The local retail sector depends on three components: Local purchasing power, tourists’ expenditures, and exports to Syria,” said Jihad Tannir, Deputy-Chairman of the Beirut Traders Association (BTA). He said these three indicators are currently low: “Exports to Syria are minor due the ongoing conflict there, there are no significant returns from the tourism sector because of local instability and the GCC tourist ban, and the local purchasing power is quite restrained.”

The index shows that households are applying stricter self-imposed austerity measures, extended not only to durable goods but also to seasonal and festive purchases like toys and clothing, as well as basic goods.“People are even limiting their consumption of basic commodities like food and beverages,” Tannir said.

Compared to the fourth quarter of 2011, expenditure on footwear and clothing dropped by 42 percent and 35 percent respectively. Tannir said this sharp drop has affected retail outlets in Down Town Beirut, with many stores closing their doors: “We will see more stores closing in Ashrafieh and Mar Elias because of this market breakdown.” Tannir said that company mergers might be a good solution for smaller companies to survive.

Basic sectors have witnessed milder declines. Food sales in supermarkets have declined by 0.6 percent, despite the influx of a considerable number of refugees from Syria. The sales of alcoholic beverages dropped by 8.5 percent. “The retail sector depends on the middle class which is currently the most affected by the crisis,” Tannir said.

The level of consumption of durable goods posted sharper decreases. Sales of home accessories dropped by 58 percent, while home appliances sales fell by 7.5 percent, and furniture sales fell by 4.5 percent. Sales of toys were down by 52 percent.

A drop in spending on cultural and educational purposes was also underlined. Expenditure on books dropped by more than 25 percent.

The only sector that showed relatively noticeable spending increase was the tobacco sector, with an almost five percent increase despite the smoking ban.

Overall retail trade activity witnessed a 2.88 percent growth during 2012. These positive figures were due to solid commercial growth during the first quarter of 2012, which faltered thereafter. In the coming months, retail performance is expected to drop further, according to Tannir. “The permanent political instability, along with the expected elections will not guarantee a fertile environment for any retail improvement.”


The BTA-Fransabank Retail Index was announced for the first time in September 2011 as a joint partnership between the BTA and Fransabank, with the technical support of the Central Administration of Statistics (CAS). The index, announced on a quarterly basis, aims to reflect the pulse of all active business sectors in the local retail trade market.