A total of 1,500 shops closed down in the north in 2016, while another 145 closed down in the first two and a half months of 2017.
The figures were announced by the Turkish Cypriot chamber of shopkeepers and artisans. The chamber estimates that 70% of the shops that have closed down belonged to people who have been in the sector for more than 5 years.
According to Turkish Cypriot newspaper Havadis, the head of the chamber Mahmut Kanber said that the crisis in the market has hit the small shopkeepers as sales have dropped by 30%.
“The shopkeepers which are still conducting business are being crushed under the weight of the debt towards financial institutions in some cases towards loan sharks,” said Kanber.
Kanber stressed that the administration needs to take measures urgently, suggesting that income and expenditures should be calculated in the same currency.
Kanber also said that people have stopped buying with cash and are using their credit cards for their shopping, basically living on debt. This is not only causing a drop in sales but also a shortage in cash flow in the market.
“Because of the fluctuations in the exchange rate, the buying power of the consumers has diminished. People are even starting to cut back on shopping for food,” claimed Kanber.
Kanber said that their research has shown that people are trying to save money by even cutting down on expenditures for food.
He also said that consumers are looking for cheap solutions and turn to products of lesser quality.
“Of course this has had an impact on the shopkeepers”, said Kanber who demanded that the administration does something to stop this trend.
“We have to decide on one currency. If it is Turkish Lira or a foreign currency, so be it. We need to have one currency for our income and expenditures. The administration needs to start calculating the value of imports in Turkish Lira.”
Kanber was referring to the fact that state services and import taxes are indexed to a foreign currency, namely the Euro and the US Dollar. Meanwhile, their income is in Turkish Lira which is constantly loosing value compared to Euro and the USD.
“Shopkeepers are bankrupted and cannot survive by rolling over their debt”, concluded Kanber.