Economies across the world grow when individuals, cooperate and countries spend on anything and everything. When one purchases a new apparel, furniture, or a stock is bought and sold on a trading bourse, money exchanges hands.
But one thing that has changed with COVID-19 pandemic is the spending culture. Spending is down across all segments of the economy, brought on by COVID-19 safety protocols including the restriction on movements of people, ban on gatherings and social distancing measures. Now if people are unable to move, some segments would be hit severely.
In all these, arguably, the retail sector has been hit hard. As much as technology has made life easy and very comfortable for consumers, it is human nature to want to step out and make a purchase at a retail centre.
Despite the worries ahead, one of the nation’s leading players in the retail sector, Orca Deco, is looking into the future with great hopes even though the pandemic has brought with it some economic challenges and necessitated the introduction of some measures to ensure a stable business that can run for decades.
Managing Partner of Orca Deco, Rayan Sharara, speaking to the B&FT as part of a special publication on retail, on the theme, Spotlight on Ghana’s Retail Market during the COVID 19 Pandemic, noted that the only thing that would ensure the sustainability of firms when they are hit with such pandemics or anything close to it, is enough stocks.
According to him, even though exchange rate volatility and revenue turnover is a huge challenge for businesses, especially in developing countries, there should be some effort put into keeping reasonable stocks to cushion a retail operation in times of a pandemic. For him, most importantly, COVID 19 has also made it clear that every business strives on the health of staff and customers and its about time businesses put their money where their mouth is.
Care for staff is crucial to survival.
He noted that the pandemic also revealed how important it is to believe in your staff and ensure that they trust that the brand will cater for their need no matter the circumstance.
“In the early part of the pandemic, we consulted our lawyers on what to do with the staff as the lock down was eminent and we were going to get zero sales during that period. They advised us to cut down salaries, lay off and introduce some other measures but after review, we said no. Because if these people have helped us during the goods times why don’t we support them during the hard times.
We therefore took a decision to pay all our staff their full salary before, during and after the lockdown. During the lockdown, the company parceled some foodstuff and presented it to staff every week. We additionally topped up their salaries by GH¢1,000 to cushion them and their families while at home. This move has endeared us to them and they trust the brand now more than ever. They are the first call to customers. No one sees me, so if they are happy, our customers would be happy,” Mr. Sharara said.
Going digital must be tailored to meet Africa’s needs
He added that, even though the world is moving towards online retail sales, Ghana and Africa needs to customize a platform that fits its need and not copy blindly from the West.
“We live in a different world, the size of rooms in the west is not the same here in Ghana, the knowledge on color and texture is not the same of the ordinary Ghanaian, payment systems are also more secured there. It is now on us to customize a digital platform that will suit our needs and not just adopt blindly because it would have little effect on sales.”
He revealed that despite COVID-19 restrictions in place, Orca Deco still sells more physically than through digital platform due to the customer habit of the Ghanaian and all these indicators must be factored in building an online platform to drive retail sales. This is something Orca Deco is currently working on and hoping to launch their online platform very soon.
Lost revenue to pandemic but gains in information transfer
He said the company has lost huge revenue due to the pandemic just as other sectors but one of the gains chalked is information transfer. For him, the experiences gathered from the 18 African countries they are present in is helping the company to be ahead of the pandemic as they regularly update themselves on measures being implemented in the various countries.
The positive and negative effects the pandemic is having on the business and how others can work to mitigate the negative effects is crucial to survival.
Healthy citizenry means buoyant economy
Mr. Sharara is seriously advocating for every sector of the economy to build at least one hospital at their populated location to cater for the health of the staff and the community they serve at a very low cost. He believes that this would be a great opportunity for businesses to support government to provide good health to the citizens and ensure that a healthy nation is being built to assure a buoyant economy.
“Money circulation around the world, around the country and business transaction all rely on one thing that we all take for granted, the health of our citizens. All business transaction, retails, shops, everything depends on the health of our citizens. This means that the health of our citizens is the invisible foundation upon which our economy is built.
The pandemic has shed a lot of light on the health sector, not only in Ghana but across the world. The President’s vision to build 88 district hospitals is a great move because the presence of a hospital means a lot to the health of the people but I think that is not enough. The retail sector needs to also build a hospital to take care of our staff.
Just on the Spintex Road, you can count the big retail players here; we can come together and build a hospital to cater for our staff. If we are able to do this, imagine the hospitality sector, financial sector, industrial sector and other sectors venture into this. It is a long-term investment but it is worth it for generations. The sacrifice today would build tomorrows economy.”
Mitigating impact of global recession on Africa
Most importantly, he wants a national conversation on measures that must be put in place to mitigate the effects of a looming global economic recession. He told the B&FT that, an economic recession overseas is bound to happen looking at the number of job losses that has resulted in huge sums being devoted to cater for citizens as well as industrial sectors that are struggling to keep their operations due to the effects of the pandemic.
He says Africa is not being hit hard currently due to the characteristics of the disease on the continent but this is the time when plans must put in place to ensure that when Europe, America and Asia sneeze, Africa would not catch a cold.
“It might not affect us now but the world is connected, it will affect us and we need a national conversation on how to handle it. We must sincerely answer the question on what we have to do now to avoid a world economic recession. After that, we have to begin acting to ensure we safeguard our economies.”
Pandemic’s impact on value chains; AfCFTA must succeed
Speaking on how the pandemic has affected their value chain, he said the company was compelled to shift its stocks from China to Europe during the peak of the pandemic in China but when the tables turned, it had to reverse back to China due to the devastation in Europe.
As a result, one of his recommendation is Africa investing in the manufacturing sector and ensuring a smooth transportation of the goods on the continent. He said the Africa Continental Free Trade Area Agreement could not have come at a better time but in addition to that, land, air and sea transportation on the continent must be made as cheap and flexible as possible to encourage intra Africa trade.
“As we speak it is expensive to transport goods to and from African countries from Africa than it is to transport them from Asia and Europe to those same countries in Africa. That must be changed and that can happen if we unite Africa in terms of roads, rails, airports etc to be able to allow companies like us to say I want to open a plant in Ghana and send goods to Zambia at a good cost that will make me earn a good margin. These are the type of agreements that we need to be built to support the continent.”
Rayan Sharara, Managing Partner, Orca Deco
