Who is in the mood for shopping now? The security situation, the war, and the poor national mood led to a significant decline in trade and leisure revenues.
Businessmen have recently complained about the Finance Minister's economic outline, which they say does not meet the needs of the period and has caused many employers to put employees on unpaid leave.
Mall managers, chains and leisure complexes are reporting a significant decline and are asking for an outline that will help them survive the period and that will include, among other things, flexible unpaid leave.
Smotrich (archive), photo: Oren Ben Hakon
Hai Galis, CEO of Big Shopping Centers, told Israel Hayom that "in the first week of the war there was a 80%-70% drop in revenues. Today the decline is about 40% compared to a normal day. The descent, of course, depends on the region. There are centers like Ashdod where there are quite a few sirens, so the decline is more significant, and in the north too, it's a catastrophe. People only buy what they need, because there's no mood."
It should be noted that Galis notified tenants last week of easing payment arrangements in October and November. For example, at the beginning of November, only management fees will be paid and no rent will be paid in advance. The basic rent for October and November will be eliminated and tenants will pay rent at a rate of the store's contractual redemption. October's basic rent, which has already been paid, will be credited.
Assaf Swisa, CEO of Arad Textiles,
Asked what they expect from the government, Galis replied, "We've gotten used to the government not really counting us, but just as we supported our tenants, the government should do the same. If they don't do that, after the war they will wake up to a severe economic crisis. They have to take actions that will keep businesses going and keep their heads above water."
Speaking out against shutdowns
Asked if they were planning any kind of protest, such as shutting down businesses following the plan, he replied, "We are doing the opposite. Everything must be done to restore the economy, and I am against shutdowns. It is of great importance that everyone make an effort to operate the economy and businesses in the most significant way that the Home Front Command allows. This is so that the damage to the economy will be as small as possible and that we will be as strengthened as possible."
Other malls that have initiated concessions for tenants are Melisron (Ofer Malls), Azrieli Malls and Mix Real Estate. According to the plan, for November 2023, Melisron will grant its tenants a discount of 25% of the rent and will allow the balance of the payment to be spread out into three equal monthly payments. The company also announced that it would give a 3% discount on management fees.
Azrieli Malls Group has announced that it will not charge for the November 2023 rent. In terms of management fees, it was written that at the beginning of November, a payment of 25% will be charged and the balance will be collected in forward payments.
Hai Galis, CEO of Big Shopping Centers,
Mix Real Estate, the real estate arm of Half Free, which owns Mix complexes, announced an unprecedented and first step in the commercial real estate market in Israel, in which it decided to approach commercial tenants who were forced to close the stores due to the situation, and will not charge them rent and management fees in October.
"Not a good layout"
Dan Piltz, CEO and co-owner of Dizengoff Center, commented on the number of visitors, saying: "This past week at the Center there was a clear recovery compared to the past two weeks. In the first week, about 8,000-12,000 visitors came a day and in the second week 15,000-20,000 visitors a day. We have now reached 24,000 visitors a day compared to 30,000 in normal times. However, these are weak purchases in areas such as fashion, jewelry and more. In the field of fashion there is a strong injury, because you need mood. In what is a luxury and not a commitment, the reality is that the harm is the hardest."
Assaf Swisa, CEO of Arad Textiles, commented on the significant decline in activity, saying, "We are of course seeing a significant decline in both traffic volumes and revenues. Most of the attention shifts to food and stocking, and certainly not to non-food, which is declining in priorities. Not a single employee of ours has been placed on unpaid leave, but in the background we are converging to a point according to the Ministry of Finance's outline that makes it impossible to live like this for long.
"This is a 60%-50% decline in trading volumes. It should be noted that since Sunday after the war, we have donated 40,000 towels to the soldiers and the envelope. There is a need for flexible unpaid leave, according to the European model, which allows flexible employment."
Last Thursday, heads of organizations attacked the Minister of Finance and the economic outline formulated by the Ministry of Finance at a special emergency conference convened by the Forum of Economic Unions. Shahar Turgeman, chairman of the Trade Chains Association, estimated at the press conference that "there are now 200,000 employees on unpaid leave, and every week there will be another 100,000 on unpaid leave." Turgeman said: "Your outline, Minister of Finance, is not good and will lead us borrowed."
"Economic uncertainty"
Another area that has suffered a lot of damage is naturally the field of attractions. According to Dr. Ofir Miller, Chairman of the Israel Attractions Association, "In the past three weeks, 80% of our businesses were closed because of the war, uncertainty and Home Front Command directives. Some of the employees were drafted into the reserves, which also has an effect, and we all went into learning mode. We are currently in economic uncertainty and the feeling is that the event is not being managed properly because there is still no plan."
Dr. Ofir Miller, Chairman of the Israel Attractions Association,
As part of leisure activities, cinemas were also affected. In a letter written to his employees, Avi Edri, CEO of Cinema City, said: "The state has not yet set rules and/or compensation and payments to employees."
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