Connect with us


Europe’s shopkeepers on the warpath over lockdowns



Many European shopkeepers reluctantly accepted the need to close during the coronavirus lockdowns in the spring, but the second round of shutdowns in the autumn is proving a more difficult pill to swallow for bookstore owners, florists and hairdressers from Italy to Ireland — and harder for governments to enforce. 

France’s small traders, backed in some cases by their local mayors, have complained about the injustice of the measures imposed by Emmanuel Macron’s government from last Friday, arguing the restrictions on shops favoured big chain stores and online retailers such as Amazon.

They were further enraged by Amazon’s launch of a premature “Black Friday” sale, supposed to be on November 27, which prompted remonstrations from the French finance ministry and a promise from Amazon to stop publicising the presale.

“What we want is not just aid money,” said Francis Palombi, who heads the Confederation of French Traders. “We want above all to open, open, open!” 

In Italy, protests have erupted over the past week in a dozen cities, including Rome, Milan, Genoa and Palermo, after the government approved a new decree forcing cinemas, theatres and gyms to close, and bars and restaurants to shut by 6pm across the country.

Taxi drivers occupied the central square in Turin, and restaurant owners in Cremona beat pots and pans. Small businesses say that they are on the verge of bankruptcy — but the government is expected to introduce further curbs on Wednesday in any case because of what Roberto Speranza, health minister, called “terrifying” new numbers for Covid-19.

Such protests point to the narrowing space for manoeuvre available to European governments that want to avert more deaths and prevent hospitals being overwhelmed, while keeping their economies alive. Mr Macron had said he wanted to avoid a second national lockdown, but imposed it anyway, partly under pressure from the government’s scientific committee. A few days later, the move was mirrored by UK prime minister Boris Johnson, who had also vowed not to resort to the measure.

‘The death of local stores!’ — a sign in the window of a clothes shop in Blotzheim, eastern France © Sebastien Bozon/AFP/Getty

Italian restaurant and bar workers gather in Piazza del Popolo in Rome to protest against the government’s coronavirus rules © Yara Nardi/Reuters

At the weekend, the French government sought to appease small retailers by caving in to their demands that supermarkets should sell only “essential” items such as food and wine that can also be sold in neighbourhood stores. But critics predicted the move would open the door wider to online retailers that have already benefited from the pandemic. 

“I want to guarantee that everyone is treated the same, whether it be in a big supermarket or a small shop,” said French finance minister Bruno Le Maire, who also took a swipe at “a handful of irresponsible mayors” who were “threatening the health of the French people” by allowing shops to open contrary to central government rules.

Olivier Faure, leader of the opposition Socialist party, seized on what he called the government’s incoherence and incompetence. 

“You have small traders against whom the big retailers are competing and so you say, ‘OK, no competition, we’ll shut down everything for everybody’, and at the end of the day it’s a godsend for Amazon, which will be the only name able to sell in this period of lockdown,” Mr Faure told France 2 television. 

Seattle-based Amazon has emerged as a winner of the pandemic: global sales have soared 35 per cent in the first nine months of this year to $260bn, with consumers shopping online and companies using its cloud computing services to handle remote work. Struggling to keep pace with demand, the company founded by billionaire Jeff Bezos hired 250,000 workers globally between July and September.

European governments’ response to the backlash has been hesitant: Fnac-Darty, a French retail chain that sells electronics, computers, books, music and games, was initially told it could stay open because it sells products deemed essential such as printers and laptops. But after independent booksellers and toy sellers slammed the decision as unfair, the retailer was forced to block off its non-essential sections. Faced with a similar pushback, Belgian authorities have also forbidden bigger retailers such as supermarkets from selling products deemed non-essential.

French retailer Fnac-Darty © Lewis Joly/AP

A shop in Eggenfelden in Bavaria puts up a sign announcing its temporary closure in a local lockdown © Christof Stache/AFP/Getty

Germany, whose “lockdown-lite” went into force on Monday, has not gone as far as France and Belgium: unlike during the first shutdown, all shops will be allowed to stay open.

The decision was informed by evidence from the government’s scientific advisers, who have argued that there is a much greater risk of infection in places where people interact socially — such as concert halls or restaurants — than in retail spaces, which are rarely if ever the source of a Covid-19 outbreak.

“You can close down everything, maybe that’s the fairest thing to do, but it’s maybe not the most practical thing to do,” said German chancellor Angela Merkel on Monday. “The idea that people are only [satisfied] when everything is shut down — that doesn’t make any economic sense.”

This is an argument also put forward by Irish shopkeepers, who are fighting a similar battle to the one waged by their French and Belgian counterparts after Mícheál Martin’s government closed non-essential retail for six weeks on October 21.

“The week before the lockdown, out of 649 clusters there were two in retail and two in personal grooming,” said Neil McDonnell, head of chief of ISME, a trade body for Ireland’s small businesses, citing official data

Back in France, as across Europe, the long-running battle between shopkeepers and Amazon has intensified. The CDF which represents 450,000 small retailers, launched a petition in May calling for a moratorium on the ecommerce group’s expansion under the slogan: “Yes to neighbourhood shops; No to new Amazon warehouses!”

Additional reporting by Davide Ghiglione in Rome, Arthur Beesley in Dublin, Guy Chazan in Berlin and Michael Peel in Brussels

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Rising inflation complicates Brazil’s Covid-19 crisis




After seven months in lockdown, Michele Marques received some unwelcome news when she returned to work: while she was away the prices of almost all the products she uses as a hairdresser had soared.

“A box of gloves rose 200 per cent. Colouring products increased at least 100 per cent,” said the 37-year-old from São Paulo, underlining how costs were rising while her revenue had collapsed. “I had to raise the price of my services, too.”

It is a dynamic that is playing out across Brazil, adding an extra layer of complexity to the country’s coronavirus crisis, which has already claimed the lives of almost 350,000 individuals and pushed hospital services to the brink.

With much of Latin America’s largest economy being shuttered, inflation is surging to its highest level in years, fuelling a silent scourge of hunger among poorer citizens that has run in parallel to the Covid-19 pandemic.

“The high price of staple foods — rice and beans, for example — has led to the disappearance of these items from the table of millions of Brazilians,” said Ana Maria Segall, a researcher at the Brazilian Research Network on Food and Nutritional Sovereignty and Security. In the 12 months to the end of March, the price of rice increased 64 per cent and black beans 51 per cent.

“In Brazil currently food inflation has penalised the very poorest, preventing them from having adequate access to food and in many situations leading to hunger,” she said, adding that rising unemployment and the curtailment of social programmes were also contributing factors.

Volunteers hand out food in São Paulo © Alexandre Schneider/Getty Images

Less than half of Brazil’s population of 212m now has access to adequate food all the time, with 19m people, or 9 per cent of its inhabitants, facing hunger, according to a recent report by Segall’s group.

“I’m doing some odd jobs, but it’s not enough to keep us going,” said Jonathan, a 28-year-old who lost his job in the kitchen of a Chinese restaurant in São Paulo when the pandemic began. He said he now struggles to provide enough food for his three young children and pregnant wife.

On a 12-month basis, inflation in June is expected to surpass 8 per cent, far above earlier estimates. In the 12 months to March, food prices jumped 18.5 per cent, while the price of agricultural commodities in local currency surged 55 per cent and the cost of fuel increased almost 92 per cent.

Line chart of Percentage increase over past 12 months showing The price of rice in Brazil is soaring

The developments pose a fresh challenge to President Jair Bolsonaro, who is already under fire for his handling of the Covid-19 pandemic. Across Brazil’s biggest cities, graffiti has sprung up labelling the populist leader “Bolsocaro” — a portmanteau of his name and the Portuguese word for expensive.

The rising prices are also likely to provide useful ammunition to leftist former president Luiz Inácio Lula da Silva, who returned to the political fray last month and may challenge Bolsonaro in elections next year.

“Bolsonaro is to blame for the increase in food prices, he is to blame for everything. They have to remove this guy,” said Maria Izabel de Jesus, a retiree from São Paulo.

Armando Castelar, a researcher at the Brazilian Institute of Economics, said the government had underestimated inflation both in terms of the numbers and also “how much a concern it should be”.

He attributed the rising prices to the devaluation of the Brazilian currency, triggered in part by the stimulus packages passed by the US government — which helped to bolster the dollar and led to higher Treasury yields — and the brighter economic outlook outside Latin America.

“You have a situation where commodity prices are going up because the global economy is going to grow a lot this year. With the growth in the US, interest rates are going up and the dollar is strengthening. This puts a lot of pressure on the exchange rate in Brazil and emerging markets in general,” he said.

As the spectre of inflation loomed last month, the Brazilian central bank raised its key interest rate by 75 basis points, higher than the half-percentage point many economists had expected. A further rate rise is expected next month.

“The central bank acted correctly, but it cannot stop there. It is important not to be too lenient in dealing with this,” said Castelar.

Silvia Matos, a co-ordinator at the Brazilian Economy Institute, also pointed to Brazil’s weakening currency as a contributing factor to inflation. But she said the slide in the real was triggered by investor concerns over Brazil’s deteriorating public finances.

Following the creation of two separate stimulus packages to mitigate the impact of Covid-19, government debt has risen to about 90 per cent of gross domestic product, a high level for an emerging market economy.

The rollout of the second of these packages began this month, with 45m Brazilians set to receive $50 a month for four months.

Critics said, however, these stipends were not nearly enough to keep people both fed and at home in lockdown.

“It is essential that the emergency aid is of a greater value, so that people do not leave the house but no one also stays at home starving,” said Marcelo Freixo, a federal lawmaker with the leftwing PSOL party.

“We need to reduce the circulation of the disease. Brazil is already experiencing 4,000 deaths per day. We will reach 500,000 total deaths by the middle of the year.”

Matos says that inflation had hit poorer citizens much harder than middle-class and rich Brazilians because a larger portion of their income was dedicated to food, the price of which has increased substantially.

“The only thing that could help right now is to get out of this pandemic,” she said.

Coronavirus business update

How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces? Stay briefed with our coronavirus newsletter.

Sign up here

Source link

Continue Reading


Can CVC pull off a $20bn ‘deal of the century’ at Toshiba?




Proposed management buyout looks like an improbable win for the Japanese conglomerate’s embattled CEO

Source link

Continue Reading


‘We’re running towards a cliff edge’: UK electric bus makers face survive-or-die moment




The commute on the number 43 bus past the Bank of England between London Bridge and Friern Barnet highlights the critical challenge facing the UK bus industry.

The sleek double-decker is one of the capital’s 450 electric buses, but no more than a third of the seats are full during midweek rush hour as the industry struggles with the collapse in passenger numbers.

For the producers of electric and hydrogen vehicles, the coronavirus crisis came just at the wrong time as they prepared to overhaul Britain’s fleet of 38,200 buses and take advantage of diesel falling out of favour.

The ambition to transform the market to green powertrains remains — but now the primary concern is how it can stagger back to health after passenger numbers dived more than 80 per cent at one point during the crisis last year.

“We’re running towards a cliff edge, if we don’t start getting orders,” said Andy Palmer, chair of Leeds-based bus maker Switch Mobility and former Aston Martin chief executive. “The key point is speed. The industry needs to get back on its feet and manufacture at scale.”

To get those orders, manufacturers need government help, which ministers recognised with a promise of £5bn for buses and other transport in early 2020.

Boris Johnson
Boris Johnson’s national bus strategy is the biggest transformation of the sector since deregulation in 1986 © Steve Parsons/Pool/AFP/Getty

This was narrowed down in England’s national bus strategy — the biggest transformation since the sector was deregulated in 1986 — to £3bn in March, specifically for buses and the reaffirming of support for building 4,000 low-emission vehicles.

As part of this strategy, the government launched the tender for the first tranche to support 500 buses at the end of March.

Still, some operators worry government money may be as slow in arriving as some of the country’s buses, undermining their desire to pump money into the electric sector.

“It’s only through making profits that we can invest,” said David Brown, chief executive of Newcastle-based Go-Ahead. He points out that electric buses cost twice as much upfront as diesel.

It means the big operators, which include National Express, Stagecoach and FirstGroup as well as Go-Ahead, need the subsidies soon if they are going to invest in orders for battery-powered vehicles.

Paul Davies, president of the UK’s largest bus and coach manufacturer Alexander Dennis Limited, ADL, said orders were about 1,000 units lower than expected in 2020, almost half of pre-pandemic expectations.

Other groups needed intervention to survive. Northern Ireland-based Wrightbus was on the verge of collapse before being rescued by businessman Jo Bamford, the heir to JCB, Britain’s construction equipment manufacturer, known for its yellow diggers.

Bamford, however, is upbeat, saying orders for electric buses will come, helped by moves towards low-emission street regulations in cities and operators such as National Express committing to a zero-emission bus fleet by 2030.

But, even on optimistic forecasts, the UK’s three main electric bus manufacturers — ADL, Switch and Wrightbus — face big challenges from overseas rivals.

China’s Yutong Bus, the world’s largest producer, is way ahead of them, having sold 15,300 low-emission buses globally last year.

Its sights are also firmly set on exporting globally, selling 130 buses in the UK in the past 12 months and receiving an order in March for 55 more from Scotland’s McGill’s Buses.

ADL is attempting to meet this challenge by joining forces with Chinese battery maker BYD, while Bamford has turned to hydrogen as a way to get an edge. He owns Ryse, a hydrogen fuelling company.

A Yutong bus
Leicester’s E12 electric buses, built by China’s Yutong Bus

“When someone has 73 per cent market share [of the global automotive electric battery market], it’s difficult to knock them off their perch,” he said, explaining his bet on hydrogen.

That bet was given a boost in March with a £11.2m government subsidy to create a hydrogen technology centre in Northern Ireland, where Bamford’s Wrightbus is based.

Even with government backing, the challenges for UK producers remain great, with groups such as Yutong on its third-generation of fuel cell buses in China, according to its UK boss Ian Downie.

In contrast, Britain’s biggest producer ADL is still on its second-generation and, like Wrightbus, which says it is constantly updating its technology, is reliant on fuel cells from Canada’s Ballard.

The UK government could also run into trouble with the World Trade Organization if it explicitly advocates supporting local procurement, said a person familiar with Department for Transport discussions on the policy.

On top of this, the British groups face a challenge from Arrival, which listed in the US in March through a special purpose acquisition company and is backed by South Korea’s Hyundai. It aims to start producing buses from its “microfactory” by the end of the year.

In the view of Palmer at Switch, the UK groups will need to develop overseas markets to achieve the economies of scale to make profits.

“Can you survive on the basis of the UK alone? Our conclusion is you can’t,” said the chair of Switch, which is owned by Indian auto group Ashok Leyland. He pointed to India’s ambition to order 7,000 low-emissions buses by the end of its 2022 fiscal year that could benefit Switch.

However, before looking to expand overseas, the UK’s manufacturers need to get through the pandemic, which still hangs ominously over the sector, clouding its outlook.

The government must help UK groups “get us over this valley of death” to ensure their survival, said Nigel Base, commercial vehicle manager at lobby group the Society of Motor Manufacturers and Traders.

Source link

Continue Reading