After a prolonged closure, most of the economy reopened this week, but with mixed feelings. On the one hand, the public stormed the stores, and especially the fashion stores – and this is clearly reflected in the credit card usage data from Sunday this week.
But the reopening is accompanied by a great fear on the part of traders against the next closure, alongside more immediate problems, chief among them a great shortage of workers.
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Even during the closure, before the economy reopened, it was clear that fashion chains and restaurant owners would run into problems with workers. Yesterday, two days after the opening, the fashion chains reported a shortage of more than 30% of the number of employees required to fully operate the stores.
According to chain executives, workers are reluctant to return because of the sick leave model, which guarantees them payment by the end of June 2021. Even if they do not return to work. Where an employee wrote to the manager: “You got confused, call me in June and I’ll tell you if I’m back.”
The marketing chains are begging for employees, in an attempt to maintain the shopping experience as much as possible under the limits of the corona and reduce queues outside stores. In the malls the working hours have not been shortened, and they are open from nine in the morning until nine in the evening. Due to the shortage of workers, the chains have extended the shifts for workers who do arrive.
“We opened all the stores but with fewer employees and I have a problem with the logistics warehouse,” said fashion group chairman Brill Shachar Turgeman. “I can not bring back 12 of the 50 Marlog employees from the hospital. They do not want to return. They have a challah of NIS 7,000 a month, with me they will earn NIS 8,500, so why would they come back for NIS 1,500? Public money goes down the drain. “
Inter Jeans CEO Yaakov Peretz says similar things. “We have a shortage of employees, especially salespeople. “I was able to return only 70% of the workers from the hospital. The rest are not interested in returning to work.” He says, “When I call they say they stay in the Knesset until the end of June and it serves their interest. “These workers earned NIS 8,000-9,000 a month and in the IDF they receive the same thing. They prefer to go to the sea instead of returning to work. We started trying to recruit workers and in the meantime those who returned to work work more hours in each shift.”
This problem can also have consequences for those employees who do not want to return from sick leave. If the network managers find that they can manage without the workers who have gone out to sick leave, or with fewer workers, this may lead to a wave of reductions. “Now I’m getting along out of coercion, but if it’s going to work out, why bring back the workers in the Knesset?”
The vigilant public traffic in the fashion chains has contributed to the state of the malls, where tenants talk about good sales, a little above average. In most chains, sales were about 20% higher than on a normal day, but it should be taken into account that these are the first days after the closure and the public is still stockpiling and filling deficiencies – so this increase is also expected to moderate.
For consumers, the next two weeks are extremely attractive. The fashion chains are stuck with excess inventory and have between two and three weeks to get it off the shelves before they start selling clothes for the spring season. Accordingly, trading reopened in in-depth promotions and end-of-season promotions. If during this period in the regular season the discounts reached 60% or 50%, now the promotions reach up to 70% discount. This gap is not the most significant thing for the consumer – the really big difference is in the supply.
In regular end-of-season specials, there are almost no sizes left and consumers are content with models that sell less. Now, the shelves in the fashion chains are full of almost all models, colors and sizes, and at end-of-season prices. Precisely the basic models sold every year in these promotions will most likely be reset in warehouses and sold next year at full price.
As expected, the opening of the economy has boosted the use of credit cards. Data from the Shebaa company, which manages the national payment card system, shows that on Sunday there was a 29% jump in the use of credit cards compared to last Sunday. In total, on Sunday this week, Israelis spent NIS 1.34 billion on credit cards. “Calcalist” indicates that it was the online purchases that led the jump, while physical purchases in businesses rose by 17% on Sunday this week, online purchases jumped by 37% compared to last Sunday, and stood at NIS 870 million.
There are several explanations for the phenomenon: First, areas that were closed – such as cultural shows and hotels – were opened yesterday and a large part of the purchases in these activities were made online. The return of many employees to physical workplaces has also increased online purchases, as in some cases the many hours at work allow them to make such purchases. It is also possible to learn from the data that online purchases are on the rise both because the Corona crisis has forced many businesses to start selling online and because many pre-crisis populations did not buy online due to the crisis and are now accustomed to it.
The economy is opening up
The ISA data also provide a glimpse of the volume of credit card purchases by industry. The data show that the opening of trade mainly boosted purchases in clothing and footwear. The volume of purchases in this industry jumped by 84% compared to last Sunday and stood at NIS 96.7 million. , For a daily average in February 2020, this is a figure that is 70% higher.
A jump in activity was also recorded among acquisitions in the hotel and travel agencies industry. In this industry, the use of credit cards jumped by 35% compared to last Sunday’s data to the amount of NIS 11.6 million. But the industry is still far from recovering and back to normal. For comparison, the volume of purchases in February last year averaged NIS 37.7 million per day.
A handsome recovery was also recorded in the field of leisure and entertainment, with the opening of cultural shows after nearly a year in which they were almost completely closed. Although the shows are currently open only to the recovering population of corona and the vaccinated, Sunday data indicate a volume of purchases similar to the routine period – about NIS 3.5 million a day.
In contrast, the opening of the economy had almost no effect on some other industries. Sales of electrical appliances and household appliances recorded only a 5% increase in purchases compared to last Sunday, probably because even during the closure period, many stores in the industry remained open. The volume of purchases of Delek credit cards has also stabilized: although trade has opened and more people have returned to their physical places of work, there has been a change of less than 1% in the volume of expenses on Delek credit cards.
Overall, data from the first day of the opening of the economy showed an increase in consumer activity, but it is quite possible that they are affected by occupied demand that accumulated during the closure period. Only in a few weeks – assuming that the economy does not close again – will it be possible to see whether Israel is indeed returning to normal, or whether the economic crisis is significantly seeping into consumption.
After the trade is back to work, the next challenge is the reopening of the restaurants. Last night, an emergency meeting was held between the heads of the industry and representatives of the Ministry of Health. Corona Projector Prof. Nachman Ash, Head of Public Health Services Sharon Elrai Price, Chefs Haim Cohen and Asaf Granit, CEO of Strong Restaurants together Tomer Mor, CEO of the Association of Restaurants Shai Berman, owner of the Ronen Nimani Coffee Group and falafel owners Dear Guy. At the end of the meeting, an outline for the return of restaurants and cafes to activity has not yet been formulated, although according to the outline of the closure set by the Corona Cabinet, the restaurants are due to open in about two weeks, on March 7.
The restaurant industry claims that it is not economical for them to open less than 80% of their occupancy. The Ministry of Health is aiming, at least for now, for an outline of 20% of occupancy in a closed space and up to 40% in an open space, all under restrictions. The restaurateurs have informed the Ministry of Health that if no economic outline is found within 48 hours, they will not be able to open the restaurants on time – and whoever opens will probably have to break the guidelines in order to survive.
Reopening a restaurant is a relatively complex event that sometimes requires two weeks of preparation in advance. But in the absence of a clear economic outline, restaurateurs are not yet getting organized to open and buying raw materials. In addition, they too are likely to face the same big problem they are currently facing in fashion: returning workers from the hospital.