Tuesday 22 June 2021

Lack Of Confidence, Political Uncertainty and Rising Exchange Hitting Hard At Costa Rica’s Retail Sector

Retail centres like Multiplaza Escazú is empty all week, and not filled with shoppers as usual on weekends.

The retail sector in Costa Rica is not going through the best of times. The devaluation of the colon against the US dollar, the uncertainty in the political environment and the recent layoffs by large companies seem to be affecting retailer’s confidence in the economy.

The retail sector cut 1.850 jobs in January alone. If the exchange rate keeps rising, experts say more layoffs are in the forecast.

- Advertisement -

Despite that the first quarter of the year is normally one with greatest confidence in the retail sector, the Cámara de Comercio de Costa Rica (CCCR) – Costa Rican Chamber of Commerce – recorded the lowest value in the recent years, ie 105 points. In March 2010, for example, the value of the Confianza del Sector Comercial (ICSC) – Retail Confidence Index – was at 131 points.

The index takes into account four variables: economy, business, employment and sales, based on the results during the past six months and expectations for the coming six months.

“Normally measurements reflect high confidence due to volume of end of year sales and the back to school season, however, the election process and the increases in the exchange rate are influencing confidence in the sector”, explains Francisco Llobet, president of the CCCR.

In January alone there were 1.852 layoffs. In February, companies like Grupo Monge and Pipasa laid off 240 people and 200 people, respectively.

- Advertisement -

Further, according to figures by the Caja Costarricense de Seguro Social (CCSS) and published by the CCCR, in 2012 some 9.400 jobs were generated in the sector, while in 2013 only 5.000.

According to Llobert, a majority (60%) of the retail sector depends on imports, making the situation worse with the rise in the exchange rate in the recent weeks. Today the exchange rate is ¢572 colones at most local banks. Only a few weeks ago it was ¢550 and ¢520 at the beginning of the year.

Uniforms, clothing, food, pharmaceutical, gasoline and vehicles are among the products expected with sharp price increases in the coming months.

Although Costa Rica is not a dollarized economy, many retailers are no protecting themselves by quoting prices in dollars and then collecting payment at the current exchange rate. Browsing the new car ads, for example, hard pressed to find new car prices in colones.

- Advertisement -

We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

Today’s Covid News: Less than 800 new cases for the first time in two months

QCOSTARICA - For the first time in two months, less than...

First five months of the year reflect recovery of Costa Rican exports

QCOSTARICA - The value of Costa Rica exports increased by 23%...


Cynthia Ann Telles named new U.S. Ambassador to Costa Rica

QCOSTARICA - Today, U.S. President Joe Biden announced his nomination of Dr. Cynthia Ann Telles as United States ambassador to Costa Rica. According to the...

Today’s Vehicle Restriction June 20: only “EVENS” can circulate

Today, Sunday, June 20, only vehicles with "EVEN" ending plates CAN circulate The measure is countrywide and applied between 5:00 am and 9:00 pm, save...

New trends in coffee consumption challenge sector

QCOSTARICA - Changes in consumption habits in terms of times, types of preparation and specialties challenge the coffee sector. Most of the consumers in Costa...

Nathalie Álvarez Mesén’s feature debut, Clara Sola, ready for the Cannes Directors’ Fortnight

Q ENTERTAINMENT (CINEUROPA) Nathalie Álvarez Mesén’s debut feature, Clara Sola, is ready to take part in this year’s Directors’ Fortnight at the Cannes Film...

Today’s Vehicle Restriction June 16: 5 & 6 CANNOT circulate

Today, Wednesday, June 16, vehicles with plates ending 5 & 6 CANNOT circulate The measure is countrywide and applied between 5:00 am and 9:00 pm,...

American woman found lifeless in hotel bathroom in Sabana

QCOSTARICA - A sad discovery occurred this Thursday morning in a hotel located in La Sabana, in San José, the lifeless body of a...

The United States will distribute 55 million vaccines against Covid-19 in Latin America, Africa and Asia

QCOSTARICA - The United States presented on Monday a plan to share 55 million doses of coronavirus vaccines worldwide, with approximately 75% of the...

Week immersed in passage of tropical wave, June Solstice and Veranillo

QCOSTARICA - Today, Monday, June 21, is the day of the year when the sun stays the longest on the horizon, therefore it is...

The Best Sports To Play On A Beach

Costa Rica has some of the best beaches in the world. The coastline is blessed with golden sand, beautiful palm trees, and perfect blue...


Get our daily newsletter with the latest posts directly in your mailbox. Click on the subscribe and fill out the form. It's that simple!

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.