Wouter Torfs, CEO of the eponymous shoe store chain, can see the first signs of improvement after a year of Covid misery. Nevertheless, the uncertainty remains widespread, as nobody knows what will happen when the government removes all financial support.
Great uncertainty
The Social and Economic Council of Flanders (SERV) has just finished a new report on the effects that the Covid pandemic could still have in the coming months when the economy is more or less back to normal. For this purpose, the SERV consulted ten business leaders, including Torfs. The most important conclusion of the report is the great uncertainty that exists among the interviewed managers.
Looking at his own company, Torfs has recently seen signs of improvement: for example, turnover in the first weeks of May is back at the 2019 level. “In April, when people had to shop by appointment, come in alone and were only allowed to stay for 30 minutes, we still recorded 50 per cent less turnover in the stores. Fortunately, the webshop did well, limiting the total loss to 40 per cent,” the CEO told Belgian newspaper Het Laatste Nieuws. The worst seems to be over for stores on the outskirts of the city. In indoor shopping centres and city centres, business is still a lot weaker.
Optimism
According to the SERV report, uncertainty among entrepreneurs will continue in the coming months. “Uncertainty has become a constant,” Torfs agrees. “But everything will depend on the extent to which consumer confidence recovers. Do people feel safe when shopping? Do they have the desire to shop? The top executive nevertheless remains optimistic, as the vaccination campaign is now in full swing.
Another pertinent question: what if the support measures get dropped? Torfs is pleased that the system of furloughs is definitely in place until the end of September. That is very important in case the pandemic does flare up again. Furthermore, it remains unknown what will happen if all the support is lost: “When all the bills have to be paid – to the National Social Security Office, taxes, rent to landlords – we will see which companies will fall. We will continue to live in an uncertain climate for a while.”
Price inflation
The CEO does not believe that everything will go back to the way it was. After all, many consumers have discovered the convenience of online shopping and will continue to use this opportunity in the future, he suspects.
A clear consequence of the pandemic is price inflation: retailers now have to pay 5 to 10 per cent more for their winter collection orders, and transport costs are also considerably higher. But customers are not always willing to pay more. “Just passing on the price rises is unrealistic: e-commerce has intensified price competition. Anyone can easily compare prices at home”, concludes the top executive.
