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En Vogue Boutique owner Natasha Thackoordass puts a printed T-shirt reading Reset, Restart and Reopening on a mannequin at her South Plaza, San Fernando store on Saturday. She will welcome her customers back during today’s reopening of retail stores.

Raphael John-Lall

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While business leaders remain uncertain of the future of the retail sector, which reopens today after three and a half months of closure, economists are also not optimistic about the sector’s immediate recovery.

In yesterday’s Sunday Guardian Business, entities such as the Couva/Point Lisas Chamber and the Confederation of Regional Business Chambers warned that consumers may not be ready to spend heavily when stores reopen. Economist Dr Ronald Ramkissoon told Guardian Media that economists describe this as “uncertain behaviour,” noting under these circumstances, consumers hold on to money they have.

Adding his voice to the debate, University of the West Indies (UWI) economist Dr Vaalmikki Arjoon warned that if more people are not vaccinated and the spread of the virus is not controlled and eliminated, the country is very likely to undergo a third wave of lockdowns and restrictions, which will lead to an almost “virtual obliteration” of the private sector, extensive job and productivity losses and serious damage to households’ purchasing power.

Ramkissoon said factors such as rising unemployment, some businesses not being able to reopen and the vaccine hesitancy among some employees will impact how quickly the retail sector recovers.

“This is what economists call uncertain behaviour and such an environment is not good for business and business growth. Even those who have money will tend to withhold that spending, as they are not sure as to what will happen. To add to that, the increase in prices across the board is the effect of inflation and this means less consumption. In this environment, there will be not many chances of increased income,” Ramkissoon said.

However, Ramkissoon conceded there has been some “pent up demand” last few months.

“That is going to drive some level of economic activity. The expectation is that will lead to some increase in output from an increase in consumption, increase in investment, which will drive Gross Domestic Product (GDP) ultimately. The forecast will show for T&T and elsewhere, there is some expectation that the economy will move from negative growth into some small growth this year.”

Asked if he was confident there will be an increase in commercial activity this Christmas, he said it is left to be seen.

“Given that the economy and people’s behaviours to a large extent have changed, the uncertainties remain, but if you compare the fourth quarter of this year to last year, I think we will see a bit of growth.”

Arjoon explained how the rest of the economy will affect spending in the retail sector.

“In the short run, we are likely to see a K-shaped recovery in retail sector spending after the sector reopens. For middle and high-income households, those who kept their jobs and were able to maintain healthy cash flows, we may see a surge in their retail spending due to a pent-up demand to make up for the loss in spending in the 2020 and 2021 lockdowns. Some of this recovery in spending may also come from those who re-acquire jobs and their purchasing power increases, as some elements of the private sector re-open.”

To counter the current depressed business climate, Arjoon advised business chambers to partner with organisations such as the Inter-American Development Bank (IADB) to train and educate small retailers on better financial management, social media marketing and how to manoeuvre supply chain problems.

“They also ought to further embrace the digital platform for running their business as opposed to traditional physical spaces such as malls etc., while some can explore the possibility of diversifying or changing their business models completely and sell items that are in higher demand locally.”

T&T Chamber of Industry and Commerce CEO Gabriel Faria meanwhile said although the business community is not satisfied with the number of employees who have been vaccinated, progress is being made in the retail sector. He said feedback from members is that they have seen some “positive movement’” from those willing to be vaccinated.

“Unfortunately, we are not where we would like to be. Many people over the past couple of days, more and more employees are receptive and getting vaccinated. From talking to members, some business owners have seen levels as high as 90 per cent. Then we have had other businesses where vaccination levels are less than 50 per cent.”

He said they have been trying to persuade employees to get vaccinated.

“We have brought medical practitioners on in private sessions with companies to answer employees’ questions. At the vaccination site at the National Academy for Performing Arts (NAPA), we have found that many of the vaccinators have spent time explaining to people who have had concerns. Employers are affording training, advice on the risks among other initiatives.”

Couva/Point Lisas Business Chamber president Mukesh Ramsingh said they have been encouraging employees to get vaccinated, adding he does not use any form of coercion but rather educates people.

Tobago Chamber of Commerce head Diane Hadad meanwhile said she stands against mandatory vaccinations, adding people should be allowed to freely determine if they want to be vaccinated. She said more employees are going to get vaccinated after hearing about new variants, but said in Tobago, not many Tobagonians seem interested in getting vaccinated.