70,000 stores in Italy face closure, online shopping greatly affects physical business

At the heart of Italy's fashion industry is its once-thriving independent retail business, with boutiques offering the latest fashions and unique multi-brand mixes even in the most remote villages.

But a year into the pandemic, the devastating impact of store closures and restrictions has left Italian retailers facing one of the highest rates of store closures in Europe, with an estimated 70,000 stores at risk of permanent closure.

Data from Confesercenti, an organization that supports retail businesses , showed that sales at large retailers and small boutiques fell 3.8% and 10.7% respectively in the first two months of 2021, while online sales increased by 37.2%.

E-commerce growth accelerated from October last year , when measures taken to combat the second and subsequent third waves of the contagion led to losses in all traditional sales channels .

The shift to online shopping has significantly impacted brick-and-mortar business in Italy.

" The continuation of the restrictions has dictated a structured and non-governmental reallocation of sales shares towards online channels, " Confesercenti said . The 35,000 businesses in shopping malls and galleries face some of the greatest risks.

Confesercenti said weekend closing regulations were devastating for many retailers, for whom stores account for 40% of their revenue.

In a letter to the Italian prime minister and tourism minister, the Association of Commercial Activities in the Historic Centers of Art Cities seeks financial support , hoping that the government will support the accounting of fixed costs incurred by companies with a turnover between 65% and 70%.

Italy's clothing exports have also collapsed, with clothing items including leather and fur falling 10.9% year-on-year in February, according to ISTAT data.

The arrival of the post-epidemic era has made many consumers want to go out and shop in physical stores. Although this trend has gradually allowed retail to recover, the permanent shift of consumers to online purchases is irreversible. This behavior and shift will inevitably cause damage to physical businesses. And those omni-channel operators that integrate offline and online may be the biggest beneficiaries.

Italy

Online Business

Physical business