Trade Concentration Continues
While the Government fights against monopolies and oligopolies, simultaneously touching upon the necessity to support SMEs, concentration in the field of retail trade is in the process. More simply said, trade moves to big shops and supermarkets from small shops and kiosks. Official statistics is a proof of this.
Thus, according to the data provided by RA National Statistical Service volume of retail trade turnover in the period of January-April 2016 (as compared to the same period of the previous year) has reduced by 4.6% and comprised AMD 341.1 billion. However, that decrease is rather unevenly distributed between trading objects. For instance, volume of trade turnover through kiosks reduced by 4.1% and comprised AMD 8.8 billion. Larger—29% decrease was recorded upon turnover of trade and other objects (according to National Statistical Service they include points of sale for motor and household fuel). Trade turnover of consumer commodity markets decreased by 6.5% and comprised AMD 22.9 billion.
Trade turnover of agricultural commodity markets grew by 1.5%, however, the volume is still little—AMD 5.5 billion. And volume of trade turnover has increased through shops in the period of the first 4 months by 1.7% and reached AMD 258.5 billion.
Seemingly, growth is not so big, however, throughout recent years as a result of stabile reduction of trade turnover of small shops and stabile increase of trade turnover of big shops we face a condition, when 75.7% of retail trade is shared by big markets.
6.7% of total trade turnover is shared by consumer commodity markets, 13.4% to other objects, 2.6% to kiosks,1.6% to agricultural commodity markets.
To show more clearly the change of recent years, it’ll be proper to observe proportion of retail trade turnover 10 and 5 years ago.
In the period of January-April 2006 specific gravity of shops was 49.4%, and that of kiosks—4%. 5 years ago—in 2011 (January-April) specific gravity of trade turnover of shops reached 67%, and that of kiosks reduced up to 4%. As for figures of this year, they have already been introduced.
Unfortunately, official statistics doesn’t detail how turnover of supermarkets has changed. However, on account of recent growth of big shops/supermarkets in the capital and regions, one may conclude that trade has moved from small objects to supergiants.
Of course, if wanted, this may be grounded by economic appropriateness, reasoning that turnover of big shops is great and they are more competitive regarding scale, i.e. there is nothing bad that small-scale salesmen are going bankrupt.
However, this approach is not true. Even in the most stabile economies of the world special legislation has been adopted to support small shops and kiosks, which limits the number of supermarkets, defines special conditions for their location and generally bans their activity in settlements.
In our country it’s just the contrary, and this tendency is still in process. Touching upon retail trade it’s worth covering service sector as well, as official statistics introduces trade and service with one united portion. It has been stated, that service sector recorded 9.3% growth throughout January-April 2016 as compared to the same period of the previous year. Volume of service rendered in the period of the first 4 months of ongoing year comprised USD 368.2 billion.
Impressive growth was provided on account of “culture, entertainment and recreation” subfield, which has grown for about 50%. It’s mainly recorded on account of activation of casinos. As a result, specific gravity of “culture, entertainment and recreation” subfield service grew and reached 19.9%, yielding only the sector of financial and insurance activity (20.9%).
It should be added that concentration is recorded in this field, and after legislation change (by which casinos were moved from suburbs to regions) monopoly has almost been developed, where dominant and the only entertainment became “Onira Club” belonging to Gagik Tsarukyan, which appears with “Shangri La” naming.
By Babken Tunyan
