ECONOMY

Retail commerce creates jobs, is very competitive

Retail commerce has created more jobs during the past 20 years, 150,000, than any other sector of the Greek economy, according to a study by the Athens University of Economics and Business (AUEB) presented yesterday at the Athens Chamber of Commerce and Industry. The study, coordinated by AUEB Professor Georgios Doukidis also found that competition is working very well in the retail sector and that no single company dominates the market. The retail sector, said Doukidis, is a labor-intensive sector that provides employment opportunities mainly to those people who are otherwise vulnerable in times of economic downturn, that is, the young and the less skilled. Among the retail sub-sectors, supermarkets come closer to perfect competition, since there is no dominant chain and there are no obstacles to entering the market. In Greece, the two largest supermarket chains account for 36.5 percent of sales, the top three for 46.5 percent and the top 11 for 84.4 percent. By contrast, in several European markets, there is a dominant chain with a market share larger than 50 percent. The study has also found that the structure of the supermarket sub-sector does not favor the formation of cartels. Free market entry, the large number of players, constant innovation, the different cost structures, the lack of formal partnerships and the leveling off of demand are all factors making cartel formation more difficult. «Such a formation would be easier to occur when the rate of demand growth is high,» the report remarks. Despite the fact that most of the high-demand retail products are dominated by a few suppliers, the degree of coordination between retailers and suppliers is such that it ensures both healthy profit margins and relatively cheap prices. According to an ACNielsen research on 100 retail products in 16 European countries, conducted in Autumn 2003, Greece is in 10th place price-wise, with a price index of 95.2, compared to an overall average of 100. The most expensive country is Denmark (129.1) and the cheapest, Germany (82.8).