Nightlife: Covid waters the party: discos and bars at risk of disappearing
Consumption: lock on small businesses in Madrid
A large
closing sale
banner hangs in the window
and underneath it, even the decorative globe is labeled with the
sale
price.
On September 14, after a long vacation, they will reopen the doors of this shop oriented to the sale of clothing, especially nightgowns and robes, to liquidate the accumulated goods.
For the residents it will be something strange, since Confecciones Lourdes Fernández has been in the Centro neighborhood of Getafe "for at least 40 years".
The business has seen many crises, a financial one, the industrial reconversion that left its neighbors unemployed and even the blows of the oil crisis, and has contributed in its measure to that
12% of GDP
that small businesses represent for Spain.
However,
it has not withstood a six-month pandemic
, according to the clerk of a nearby haberdashery, "the owner decided to close to retire,"
encouraged
by "the crisis."
According to EL MUNDO
David Caraballo, Commercial Director of Local Insurance Rentals
, in 2020 two points have had an impact on the closure of small businesses.
The first is the economic crisis, the expert affirms that during the pandemic "they had an avalanche", since
the rental offer
"in locations B and C"
has shot up by 40%
.
Caraballo explains that locations A are those located in commercial streets with a lot of traffic, such as "for example the Gran Vía in Madrid";
the B's are those "perpendicular to the streets classified as A" and the C's are those that have an even lower flow of pedestrians.
The other phenomenon that Caraballo has observed for years is the
closure "of businesses that were inherited from parents to children
, there is no transition in SMEs that were passed from generation to generation."
There had already been a "cut in business in stores that were mainly trades, such as photography stores or haberdashery", and this trend is now intensifying.
The data provided by the Spanish Confederation of Commerce (CEC) also speak of massive closures
.
10% of local businesses have not raised their blinds again after the state of alarm
.
The business entity relates it to the
drop of up to 50% in billing
, which has been especially pronounced in the textile sector.
Héctor
runs, together with his brother,
Ghetto Shop Streetwear
, two young fashion stores located in Madrid, and explains to EL MUNDO that they have been particularly hit as their gender depreciates very quickly.
When the businessman reopened "he
had to put the entire collection on sale
" that he had not even been able to start selling since the season had been consumed during the months of state of alarm.
Settling at a 20% discount allowed the brothers to "pay the distributors," but
"left little room to meet rental and electricity costs
."
This added to the fact that they only received "600 euros of aid" led them to have to apply for a loan.
Another field that the CEC has indicated as very affected is that
of food wholesalers
that feed the hospitality industry.
Cristian was located there, who in February
ran together with a partner a vegan products workshop in the center of Barcelona
, which had been making pastries and breads without animal origin products for three years for other companies and individuals.
This businessman recalls that until March the business "was not losing."
However, in the state of alarm
"the production chain fell"
and "the companies that bought them ceased their activity", this led Cristian to close since
"he had no financing or savings" and
neither he and his partner could "access credits".
Both
requested one from the ICO, which was denied
, and in view of the expenses and the uncertainty they decided to cease activity "in order not to accumulate debts".
Hit the bars
The hotel industry, which
accounts for 6.2% of GDP,
and nightlife are today other
champions
of the places without activity.
The restrictions imposed by the public administrations have led the nightlife sector employers, España de Noche, to foresee the
disappearance of 60% of cocktail bars and discos.
Borja González
was the
owner of the El Metro bar in Burgos
.
The owner says that
"not being able to negotiate the rent with the landlord and the uncertainty
about not knowing if it will be able to open and how" led him to put aside his bar, which had been operating successfully for almost 10 years in the Castilian city .
There was no aid that allowed him to stay afloat once the state of alarm ended, during which time the Burgos acknowledges that "he was well covered."
Once in operation, the bar endured "a
drop in billing of 70%
", which "was not enough to cover fixed expenses", with the only bonus being a reduction in the freelance fee.
Caraballo hopes that many more businessmen will follow the path of Borja and Cristian, since "
after the pandemic curve comes one of closures
."
The expert explains that "during the covid crisis many companies have been on
standby
seeing the numbers, whether they will continue or not" and many will end up in ERE since "they will
not withstand the coronavirus."
The future of the ERTEs, which
as of September 9 still affect some 800,000 workers
, is a point that fully touches small businesses and hotels.
If there is no extension, next October the companies
will have to assume the payroll and contributions of the workers
, without being able to adjust the workforce.
This would inevitably lead those in a more delicate situation to close down for good.
In this sense, Borja relates that removing his workers from ERTE and seeing how he could not meet his payroll and expenses, because the capacity restrictions imposed in August torpedoed his income, was one of the triggers that forced him to close.
Without measures, the CEC believes that by the end of the year
there will be a destruction of 30% of the businesses that were at the beginning of the pandemic
.
For his part, Caraballo, interpreting his company's data, considers that the demand for premises has been frozen in all places, except in locations A. This leads the expert to predict that there will not be much activity until the situation normalize.
Rising from the ruins
However, when the pandemic tsunami and its sludge pass,
many entrepreneurs are thinking of starting again
.
Cristian and his partner have more projects in mind as soon as they perceive "security", since currently in Barcelona they only see "more closed premises and transfers".
The Barcelona businessman points out as one of the keys to the
hecatomb
of his union that the tourists who have not appeared this year.
In the hotel business, Borja plans to give his old bar a walk when he knows more about the circumstances in which he will be able to work, and if nightlife doesn't work, he says, he will try his luck with "a day bar.
And while waiting for the long-awaited vaccine, the business continues to see every day how new businesses, especially the smaller ones, lower the blind.
The second wave, experts warn, will be noticed this fall.
According to the criteria of The Trust Project
Know more
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Madrid
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Coronavirus Spain only recovers half of the companies lost by the crisis
CrisisThe hospitality industry protests in Madrid to demand support and prevent the closure of a third of the bars
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