The Downtown Owners and Merchants Association (DOMA) is recommending that the retail merchant sector operate under limited hours, rather than remain locked down until June 2020 and risk serious economic ramifications, even as Government begins a phased reopening of businesses in this country.
In a statement issued on Saturday evening, DOMA reports that businesses in the sector, both in the capital city and around the country, are worried that there may be nothing to reopen in June, and some 30,000 sector employees will be on the breadline.
The full text of the DOMA release, follows…
MERCHANT SECTOR FEAR AND PANIC—DOMA
The Downtown Owners and Merchants Association has listened carefully to the announcements made by Prime Minister Rowley regarding the phased reopening of businesses in Trinidad and Tobago.
Even with no intention to make a public statement at this time we are with little choice but to respond, especially on behalf of the flood of calls received by us, calls from far and wide across our nation predominantly from outside of Port-of-Spain but including several panicked expressions of concern from within our Nation’s capital city.
A cross section of our Country’s merchant sector has responded in unison and in fear of serious ramifications if, as we understand it, the merchant retail sector, which includes Malls, are required to remain closed until after June 7th.
We wish to signal immediately that we emphatically appreciate the Government’s efforts and initiatives to date and applaud, especially, the COVID-19 response of the Ministry of Health and it’s team led by our Minister of Health and the CMO for its steadfast leadership and hard work.
We are however under obligation to respectfully inform the national discussion with feedback from our sector, a network of establishments that represents more than 30,000 employees across our towns and cities and including the major participants in sub-urban shopping centres.
Cracks are beginning to show in the financial well-being of this sector and its supply chain, and we feel that we have a case for urgent consideration.
We have received calls this afternoon from the following sub-sectors:
- Furniture and Appliance Retailers and Distributors
- Woodworking shops that produce for Furniture Retailers
- Footwear and Clothing Shops and Boutiques
- Small Garment Manufacturers that sell to retail shops
- Fabric and Accessory Suppliers including Upholstery Shops
- Small Garment Makers who cannot access raw materials from fabric and Accessory suppliers especially as it relates to the opportunity to produce face masks
- Fashion Designers and Home Sewers
- Mall Operators
- Mall Tenants
- Auto Garages and shops
The common denominator of the majority of the calls were related to the inability to carry, for another month, the fixed cost overheads that have been carried since March 12th when sales in the sector began plummeting by up to 70%. By the time that the shutdown came on March 24th, 100% of revenue was lost in support of the measures needed to protect the people of Trinidad and Tobago.
Among the major components of the fixed overheads that are being carried are: Bank Interest, Property Rent, Electricity Reserve Charges, Property Insurance premiums and Wages and emoluments, which have been maintained in scales between 60% and 100% from the time of shutdown to present.
No one in the merchant sector has received any sliver of tangible support and there are now emerging exclamations of distress and panic regarding the possibility that this sector will be shuttered for another month.
Often forgotten by the economists and academics is a sector of this country’s economy that carries the employment interests of tens of thousands of persons that have commitments that include basic cost of living—rent, electricity, child support, hire purchase, etc. This sector, including the business operators in Towns, Cities and Malls, does much of the ‘heavy lifting’ of those with no other opportunities for gainful employment.
Several of those who contacted us have pointed out that by their very nature, they will have far less congregating in their businesses if they were to operate, even on a partial basis of, say, reduced hours 9 am to 3pm or of operating for three days per week from 8am to 4pm. Many indicated that their operations are in ample square footage where clients would not be forced to stand in cashier’s lines or to wait outside for entry or where the presence of even a few clients could contribute to their fixed cost burdens.
We have zero intention of quarrelling with the Government. Instead this is a plea from a sector too long misunderstood and marginalized as non-contributors to the nation’s economy. There has been very limited appreciation of the vital link between a multitude of producers and cottage industries and the end consumers via this sector. We are the foot soldiers of this economy, down in the trenches day in and day out and from this sector has come almost all of our nation’s greatest champions of business, including our conglomerates.
Mall operators have more or less given a 50% rebate on rents but that shared burden after 8 weeks is now causing distress among the operators and tenants.
Should our reasonable plea for respectful consideration of some limited operational hours under Phase 1 or for the latest Phase 2 not be agreeable to the authorities, we wish to urgently request our Governments intervention in the following areas.
Bank Interest: The deferral of principal has actually caught many business people in an ‘interest-trap’ – if because of a cash-flow shortage the business accepts the bank deferral it is actually facing punitive increases in interest charges increasing their fixed costs and further depleting their funds. In the absence of any help from the banking sector we wish to request intervention by the Ministry of Finance via the Central Bank in the form of an interest subsidy on business loans. This interest subsidy is a cornerstone of the intervention of the Governments of Canada and the UK being lauded as vital to business survival.
T&TEC Reserve Capacity: Businesses with T&TEC commercial Rate D1 meters are being charged for the electricity that they are not using. We wish to request immediate relief for all T&TEC reserve capacity charges and reversal where it has been applied already.
Commercial Rent: Payment of even 50% of rent is depleting the funding of small and medium business operators and placing incredible strain on mall owners that have major mortgage commitments. A major plank in the interventions of Governments internationally has been guarantees of rent on behalf of small and medium business operators—this with a view to making sure that when the reopening comes, these businesses are actually able to reopen.
We wish to state that our absolute objective is comity and serving the mutual interest of our Nation’s health and its economic realities.
We humbly submit that allowing those businesses listed above and who have voiced their desperate concerns to us to operate under limited hours will satisfy both of the above objectives. Failing this allowance, we wish to implore urgent consideration of the reasonable measures for Government intervention as outlined above.