At least half of the Dutch retailers are currently in the red. As there are almost no more ways to slash costs, many shopping streets may become rather empty. And even then, some fear that "half" is grossly underestimating the problem...
Half to two third of retailers do not make money any more
Calculations by Alfa Accountants in newspaper De Telegraaf show that 48 % of retailers do not manage to make money. “The size of the losses is getting bigger and the same goes for the cash flow deficits. It is no longer the independent entrepreneurs that are suffering, chains are also affected. Marlies Dekkers, Free Record Shop and Macintosh are but a few examples”, says Alfa’s Marco van den Broek.
He does not have big hopes for the future: “Everyone is struggling. Losing 10 % in turnover for the third year running is no exception. At a certain point there are no more ways to cut costs, with another 20 to 30 percent of retailers closing in the next 7 years”, according to Van den Broek.
Jan Meermans, representing interest group InRetail, believes Alfa Accountants is still underestimating the retailer problems. “48 % is still too low of a number. We cannot ignore that there are a lot of one-man businesses pay themselves a salary, with their partner working along and owning a property. Those are things that keep costs low, so you should add another 10 to 20 %.”
The Dutch government decided to slash expenditures and increase certain taxes quite drastically once the economic crisis hit. Especially the increased VAT to 21% (coming from 19%), among other measures, has not exactly given retailers additional breathing space.