Lebanon Retail Report 2016

retail activity indicators | second half of 2016
RETAIL
OBSERVATORY
LFA - CCIABML
RETAIL ACTIVITY
INDICATORS
LEBANON | SECOND HALF OF 2016
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RETAIL ACTIVITY INDICATORS

SECOND HALF OF 2016
FOURTH EDITION
A semi-annual report prepared by
LFA Implementing Partner
Published by the Retail Observatory at the Lebanese Franchise Association

© 2016 All rights reserved | Lebanese Franchise Association and QuantAnalysts s.a.r.l.
February 7, 2017
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RETAIL ACTIVITY INDICATORS

SECOND HALF OF 2016 | fourth EDITION
CONTENTS
07 Acknowledgements
08 Executive summary
11 Foreword
17 Introduction
21 I. Methodology
27 II. The economic backdrop
41 III. The indicators
71 IV. The analysis
89 Concluding notes
93 Views from within
• In Nine Answers
• Supporting retail activity calls for internal trade
reform
101 Opinion
Elusive prosperity, receding prospects
111 Appendix
• Categories and sub-categories of retail goods
and services for which sales indicators were built
• Monthly retail sales indicators for
consumer goods
• Quarterly retail sales indicators for
consumer goods
• Half-yearly retail sales indicators for
consumer goods
• Yearly retail sales indicators for consumer goods
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retail
retail
activity
activity
indicators
indicators
| second
| first half of 2016
ACKNOWLEDGEMENTS
The Lebanese Franchise Association (LFA) and QuantAnalysts

s.a.r.l. are grateful for the valuable technical assistance the
Industrial Research Institute (IRI) has offered to the Retail
Observatory and to the retail indicators project.
The LFA and QuantAnalysts are indebted to Dr. Nabil Fahed for
the valuable support and constructive advice he continued to
offer to the project.
Special thanks go to Ms. Nour Nasr for putting her expertise in

quantitative methods at the disposal of the project.
7
EXECUTIVE SUMMARY
The retail sales performance the sales indicators for three categories
indicators for 2016 moved up whereas six categories saw their
sales indicators decline in 2016.
1. The fourth edition of the
LFA-CCIABML Retail Activity Indicators 5. The sales indicator for food and
presents sales indicator data for the second beverages rose by 14 percent in 2016 from its
half of 2016 and reviews and analyses data 2015 level, but that indicator remained 5.27
for the year as a whole. percent below in 2012 base year level.
2. The overall retail sales indicator for 6. The sales indicator for sports and
the nine categories of goods and services hobbies was up 4.12 percent in 2016, but
was down 0.75 percent in 2016 compared remained a broad 36.11 percent below its
with its previous year’s level. This confirms base level.
the fact that the retail activity’s minimal rates
of improvement witnessed in 2015 have 7. The sales indicator for medical
failed to create recovery momentum in 2016. services was up a moderate 3.65 percent in
2016. That indicator exceeded the base year
3. The overall retail sales indicator level by 40.04 percent.
for 2016 remained 10.23 percent below its
2012 base year level. 8. The sales indicator for the fashion
and clothing category of retail declined by
4. Of the nine categories of consumer 5.62 percent in 2016 and remained 32.52
goods and services included in the report, percent below its 2012 base level.
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9. The sales indicator for cosmetics was December 2016 was disappointing for five
down by 1.88 percent in 2016. retail sectors. Thus:
15.
10. The sales indicator for household · the sales indicator for fashion and clothing
goods was 1.5 percent lower in 2016. In four was 5.56 percent lower in December 2016
consecutive yearly declines, that indicator fell compared to its December 2015 level;
by a combined 34.98 percent below its base · the December 2016 sales indicator for cosmet-
year level. ics was down 24.07 percent from its December
2015 level, the broadest December year-to-
11. The sales indicator for luxury goods date decline registered among retail catego-
was 6.11 percent lower in 2016 and remained ries examined in the report;
at 40.08 percent below the 2012 base year · the December 2016 sales indicator for luxury
level, the broadest negative gap from base. goods was down 8.2 percent from it level in
the corresponding month in 2015;
12. The retail sales indicator for hospital- · in December 2016, the sales indicator for
ity services retreated by 3.8 percent in 2016 hospitality services fell 8.9 percent below its
and remained 0.49 percent short of the 2012 December 2015 level;
base year level. · in December 2016, the sales indicator for
tourism services was 22.19 percent lower than
13. The retail sales indicator for tourism its December 2015 level, the second broadest
services fell 8.73 percent in 2016, the broad- year-to-date decline among retail categories
est decline for the year. covered.
14. The recurring surge in retail sales in
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16. The report adopted a number of time series. The longer time series enhance
separate but complementary statistical ap- the reliability and robustness of the seasonal
proaches to interpret the retail sales perfor- adjustment procedure and correlations. In
mance indicators. Of these approaches, the trend analysis, the longer time series have
de-seasonalization of indicator data and the made possible the addition of a non-linear
use of two alternative representations and approach to trend analysis.
analyses of the trend are particularly helpful
in imparting intuitive as well as technical The present edition confirms the report as the
significance to the time series. country’s foremost reference on retail trade.
17. Trend analysis plainly showed a The report’s rationale

downmove in the overall retail sales per-
formance indicator in 2016. Similarly, the 19. The exercise of building retail activity
trend for six out of the nine retail categories
indicators seeks to fill a gap in the national
covered by the report pointed downwards in
statistics platform, to provide retail enterpris-
2016.
es and prospective investors with a quanti-
tative gist of the retail industry, and to put at
About the present report the disposal of representatives of the retail
industry the quantitative basis to carry out
18. The fourth edition of the Retail
their advocacy mandate.
Activity Indicators report bases its statistical
analysis of indicator data on 48-month long
10
Foreword
Global uncertainty ahead
Regional confrontations persist
Promising appointments
Restoring fiscal policy, a necessary condi-
tion for recovery
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The fourth edition of the LFA-CCIABML Retail world’s economic, financial, monetary, and trade
Activity Indicators report analyses the retail conditions.
sales indicators of the second half of 2016 and
reviews the year’s jaded retail industry perfor- Decision-makers in the world’s largest econ-
mance. In that year, three persisting and heavy omy have signaled a resolute intent to adopt
drags have confined consumption expenditure pro-business, pro-growth policies in areas of
to a near-stagnation path. These are: static monetary management of the economy, taxa-
household disposable incomes, a large house- tion, infrastructure building, international trade,
hold debt overhang, and comparatively puny industrialization, energy, and the environment.
rates of growth in tourist inflows and spending. Success in instigating these policies will not
only lead to a sweeping departure from the past
Political change may have improved consumer eight meager years of sluggish growth in the
expectations in the last two months of the year, U.S., but will also have game-changing out-
but if anything, expectations remain fickle, what comes globally.
with the enduring and justifiable skepticism
about the prospects of better governance and To be sure, the expected fiscal stimulus in the
the looming regional and global uncertainties. U.S. got the seers scrambling to re-adjust their
projections on global growth. Still, many caus-
Global uncertainty ahead es for concern warrant an opposite review of
Twenty seventeen starts as a year of global eco- expectations.
nomic uncertainty, ominous but also promising,
daunting yet potentially reassuring. It is a year Indeed, signs are emerging that divergence in
that foreshadows fundamental changes in the policy views between the world’s economic
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powerhouses might skid uncontrollably into as an ideology, as suggested in the article repro-
currency, trade, and investment confrontations. duced in the “Opinion” section of the present
report.
Developments in the European Union and China
constitute weighty additions to global uncer- Regional confrontations persist
tainty. On the regional scene, developments over the
past three years have affirmed the geo-strategic
In Euroland, the worsening monetary and bank- reality that nation-states are no longer inviola-
ing muddle and 2017 being an election year in ble. In a record time, large swathes of inhabited
three key EU countries are two factors that could lands have been turned into economic waste-
trigger dynamics rendering the ‘European proj- land. If these events are prologue, then the
ect’ more wobbly and divisive. The fault line that outlook for the region is chilling indeed.
emerged from the animosity between a pros-
pering creditor country and struggling debtor When the dust clears, as it eventually will, the
countries is set to raise tension by a few rungs in region would awaken to a radically different
2017. Whereas in China, and as the debt-fuelled geopolitical ballgame. The rules of that game
decades-long growth draws to a close leaving would mirror the victor’s design for the vectors
in its wake grave financial concerns, Asia’s prime and arteries of fossil fuel conduction.
engine of global growth may be gearing to ad-
vance at a no-wake speed in 2017.
Promising appointments
In Lebanon, there are hardly any tangible
But arguably, the most momentous change on
grounds for optimism if the economy were to
the world scene is the near-demise of globalism
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.. domestic political change From an economic viewpoint, championing
holds the promise of a recovery, human rights should involve putting in place a
but just that. tightly weaved social safety net and enrooting
the principle of equal opportunities for all into
the system of economic management.
comport with economic performance in the re-
gion over the medium term. However, domestic
Deliverance from corruption is an even taller
political change holds the promise of a recovery,
order. It calls first for an agreement on termi-
but just that.
nology. Is it really corruption in the narrow
sense of the word that the country’s economy
Limited as it may have been so far, political
and society are buckling under? Or is it a more
change has brought about the appointment of
malicious malady that defines and perpetuates
State ministers for human rights and for the erad-
a system of misgovernment? Acknowledging
ication of corruption.
that a klepocratic State structure is currently in
This is certainly a laudable precedent-setting

move, as the creation of the two ministerial
Acknowledging that a
positions and the gravitas lent to the appoint-
klepocratic State structure
ments by the persona of the appointees, may be
viewed as portending preparations to bring forth
is currently in place leaves
a much-needed departure from the country’s
reformist policy-makers with
loathsome record on both counts.
the scary task of dismantling the
established interests fastened
to that structure in all branches
and levels of government.
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place leaves reformist policy-makers with the Restoring fiscal policy, a neces-
scary task of dismantling the established inter- sary condition for recovery
ests fastened to that structure in all branches In public finance, the choice between reform
and levels of government. The policy objec- and inaction boils down to a choice between
tives in that regard need to take the longer triggering public capital accumulation and
view in instigating the coding of a body of laws languishing in iniquitous and destructive rent
and regulations into a re-formed system of seeking behavior.
government. Such legislative code should set
standards for practices, promote transparency, Balancing the State budget by slashing public
establish accountability and deterrence, and expenditure down to par with the current level
enforce restitution. of public revenues is a feasible endeavor that
requires dissolving the theft component of public
Let hope spring eternal. Ideally, and over the expenditure. In the context of the destructive
shorter term, the two ministries might morph fiscal muddle and its calamitous economic im-
into policy shops and work out a clear man- pact, only a balanced budget constitutes a step
date, bold and attainable objectives, and policy in the right direction – and a modest one at that.
approaches that would, in due course, lead to in such context, demands for the ‘rationalization’
the emergence of a competitive and equitable – rather than the slashing – of public expenditure
system of economic management. are preposterous.
At the policy-making level, sounder macroeco-

nomics brought about by an apposite mix of
fiscal and monetary policies are needed to erect
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the first-order four pillars that would prop the
economy’s potential for growth. These are: (1) a
balanced State budget; (2) higher capital invest-
ment; (3) higher consumption expenditure; and
(4) a positive balance of payments.
In the meantime, coffee cup readings predicting

dreamland prosperity are gaining currency and
media echo, whereas more reasoned, fact-based,
analysis-guided, model-inspired expectations
and counsel are seen as killjoys.
Albert Nasr
QuantAnalysts
In public finance, the choice

between reform and inaction
boils down to a choice between
triggering public capital
accumulation and languishing
in iniquitous and destructive
rent seeking behavior.
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Introduction
The retail industry as a complex system
Data patterns
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In countries where the national statistics platform The building of reliable all-inclusive retail sales
is wanting, quants are perpetually enthralled by indicators, strictly by the index-building book, is a
the aptitude of the statistics administration in a statistical undertaking that would be formidable
mega economy to publish accurate retail sales even in the most advanced quantitative environ-
data with a delay of no more than a few days past ments. This is so due to the vastness and systemic
the period covered by the data. Such seemingly complexity of the retail industry.
compelling capabilities in fact reflect the con-
fluence of an efficiently administered retail sales While the definition of retail may be straightfor-
tax, seamless coordination among hundreds of ward in that the line demarcating retail trans-
state and federal statistics offices, and the work actions from non-retail transactions is evident,
ethos of large numbers of experts in quantitative defining the retail industry as a dimension of the
methods. economy at large is considerably more intricate.
Where national statistics are yet to evolve into The retail industry as a complex
facilitators of economic analysis, settling for the system
humble pie seems to be a sensible choice. Beyond the data, the indices, the descriptive sta-
tistics and the analysis is the retail trade industry
In its fourth semi-annual report, the Retail Ac- as a complex system within the economy at large.
tivity Indicators (RAI) endeavor has daunting Certainly, the retail industry presents the five de-
grounds to cover if it were to attain the objectives fining attributes of a complex system. These attri-
set by its proponents. And these objectives are butes are: (1) Diversity: the retail industry compris-
anything but humble. es a large number of diverse markets and agents;
(2) Interconnectedness: the industry’s markets
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and agents are interconnected; (3) Interactivity: a .. the retail industry presents
patterned interaction exists markets and players; the five defining attributes of a
(4) Interdependence: in that activity is one segment complex system.
of the system is affected by activity in many other
segments and is in turn influenced by variables de-
would have to be visualized as a descriptor of
fined in other parts of the system; and (5) Adaptive
multi-dimensional hyperplane.
behavior: agents adapt their policies, approaches,
and actions in response to what they perceive to
An even taller order involves the requisite that
be policies or actions taken by competing agents.
time series are available for both the predictor
variables and the dependent variable.
Such a complex system functions within a social,
Obviously, complex systems defy reductionist rea-
political and psychological context, and that, to
soning and are, more often than not, recalcitrant
a large measure, adds to the difficulty of fully
to forecasting. That the system is prone to wax and
identifying the scores of first-order variables that
wane is probably the sole predictable reality.
determine the evolution of the system’s overall
performance.
Data patterns
The report goes a long way in detecting structure
Assuming that the vast number of predictor
in data sets, as structure presumably conduces to
variables – or a significant portion of them – are
explicative narrative and prediction.
determined, and if consumption were to be
expressed as the dependent variable in a regres-
sion equation that seeks to offer an acceptably In an environment where hyperboles abound, the
accurate rendition of reality, then that equation report’s approach is to support serious analysis
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by working out descriptive statistics to the fullest and a fourth chapter to the statistical analysis of
meaningful extent. these indicators.
The analysis of retail sales indicators seeks to The “Views From Within” section of the report
highlight both category-specific attributes of includes an interview with economist and retail
sales performance as well as detect trend-shap- expert Dr. Nabil Fahed. The interview is titled “In
ing patterns. Hence, the narrative woven around Nine Answers” and sheds insightful light on nine
numbers is evidently dictated by those two aims. critical retail industry concerns.
In this issue of the report Also in that section, a brief concept note titled
As in previous editions, the report dedicates a “Supporting retail activity calls for internal
chapter to describing the methodology adopted trade reform” defines the main areas for reform-
in index building, a second chapter to setting the ing and modernizing domestic trade.
economic backdrop against which the retail in-
dustry is evolving, a third chapter to the presen- In the “Opinion” section, a bi-focal article titled
tation of the indicators by sector and time period, “Elusive prosperity, receding prospects” interlac-
es an analysis of current issues relating to glo-
balism and a review of the Lebanese economy’s
.. complex systems defy
predicament and prospects.
reductionist reasoning and are,
more often than not, recalcitrant
to forecasting. That the system is
prone to wax and wane is probably
the sole predictable reality.
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Methodology
Data sources
The data processing protocol
Comparison of sales indicators
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The fourth edition of the Retail Activity In- 1. Retailers need to benchmark their
dicators (RAI) report completes a four-year sales performance against that of
coverage of retail data and by the same token market metrics.
lengthens the time series to 48 data points,
which imparts a heftier stabilization ballast 2. Investors in the retail sector need
to the index building procedure and to the to base their decisions and mar-
resulting indicators. ket strategies on accurate actual
metrics as well as on reliable sales
The report’s established position as an accu- forecasts.
rate and reliable gauge of the performance of
retail sales is reinforced by continual fine-tun- 3. Retail enterprises need to construct
ing of the scores of key index building for- a comprehensive data framework
mulae and the prompt adoption of advanced and integrate it within their plan-
quantitative tools of analysis as they become ning model. To retail enterprises that
workable and warranted by the longer time value data-based decision-making
series. and market analysis, the RAI report’s
expanding data sets and processing
The RAI report aspires first and foremost to techniques are set to constitute a
be relevant to retail businesses by meeting both a keystone and a touchstone
their needs in three core areas of concern. to such a framework.
These are:
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Data sources they capture digital retail transactions.

As in the previous editions of the RAI report,
payment systems data and data from ma- a. Sales data from shopping malls
jor shopping malls constituted the bulk of Data sets on retail transactions recorded by
data from which retail sales indicators were shopping malls add to the robustness of the
processed. retail sales indicators derived from these sets
due to the fact that partner malls providing
a. Transactions through card payments the data are the country’s largest in terms of
Data sets obtained from credit/debit card pay- geographical coverage, footfall, tenants, and
ments systems represent a substantial propor- transactions.
tion of total retail transactions nationwide and
are hence assigned the highest weight coeffi- b. The retail enterprise survey
cient in the RAI report’s index-building protocol. Responses obtained from the retail enter-
prise survey are viewed as helpful pointers
Retail transactions carried out through card reflecting the opinion of responding retail
payments account for such a large propor- executives.
tion of total retail transactions and for such a
broad geographical coverage that no con- The questionnaire was designed to achieve
ventional sampling procedure could possibly two objectives namely, (a) securing a pre-
match. An added advantage of data from cise assessment of the performance of retail
credit/debit card payment systems is that businesses, and (b) detecting the extent to
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which retail executives are confident about in previous reports to adjust data
the prospects of their activity’s performance. for size and market position of data
suppliers,
The data processing protocol - applied the set of weights supplied
In a bid to preserve the integrity of the foun- by data providers to adjust data for
dational time series, the fourth edition of relative size of retail categories in
the RAI report retained the data processing the recorded transactions,
protocol developed in the preceding reports. - re-calculated the seasonality indexes
in order to obtain seasonally adjusted
The eight main steps of the statistical pro- indicators for the 48-month data sets.
cessing protocol followed in the fourth edi- - re-calculated trend equations for the
tion of the RAI: 48-month data sets,
- retained the year 2012 as the base - regressed the time series for each
year, category and sub-category of retail
- weeded out categories that are against economic variables in order
either not relevant to retail, or the to detect correlations.
data for which were either incom-
plete or in the nature of outliers, Comparison of sales indicators
- adjusted data for payment card mar- Retail enterprises commonly adopt the year-
ket penetration, to-date comparison of sales indicators to
- applied the same set of weights as assess change in sales performance. The RAI
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report reproduces in table form and in chart approach to analyzing retail sales
form year-to-date as well as month-to-month indicators.
comparisons, as both have complementary
advantages. Year-to-date comparisons do have the ad-
The month-to-month change vantage of detecting seasonal influences,
· provides a measure of short-lived, and the RAI report goes a step farther on that
non-trend-setting seasonal surges count by deseasonalizing indicators data for
and dips in indicators. This compar- trend identification purposes.
ison affords straightforward per-
centage expression to the recurring For time units longer than a month, the quar-
“December effect” and “Summer ter-to-preceding-quarter comparisons and
rebound”. the half-year-to-preceding-half-year compari-
· provides a measure of the medi- sons also help detect seasonality patterns.
an change occurring in ‘normal’,
non-seasonally-influenced months. Additionally, these comparisons gain in
· over longer time series, it remains a relevance in instances (a) where indicators for
valid, non-synthesized measure of a category or sub-category of retail do not
change, (non-synthesized as distin- reflect seasonal influences, or (b) where sea-
guished from metrics obtained from sonal surges and dips are ironed out through
de-seasonalization). averaging with other months of the quarter
· is the internationally-prevalent or half-year.
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The Economic
Backdrop
A positive jolt awaiting a sustained pull
The regional scene
Public finances
Infrastructure building and rehabilitation
Stimulating consumption and investment
Impactful exogenous factors
Other key variables
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.. political developments have
A positive jolt awaiting a sus- had a positive impact on
tained pull expectations, but this alone is
Lebanon’s presidential election has imparted an unlikely to have a lasting effect
optimistic spin on the prospects of the economy on economic undercurrents
rejoining sturdier output growth. Undoubtedly, and fundamentals.
political developments have had a positive im-
pact on expectations, but this alone is unlikely to
have a lasting effect on economic undercurrents
lasting economic impact are indeed practicable.
and fundamentals.
The rush to quantify that impact at this juncture
remains in the realm of speculation, what with
It is not by elections alone that good economic and
imponderable intervening exogenous factors, be
political governance are achieved, nor is the end
they positive or negative.
of desolation economics brought about by good
intentions alone. The country may have regained
a semblance of political normality – a necessary pre-
The regional scene
Dystopian geo-political influences are still
condition for economic recovery - but there is still
looming large on investment decisions, as the
many a slip between the cup and the lip.
country’s economy remains severed from the
regional economic expanse that is so vital to its
The positive impulse may have rekindled hope
endurance. On the threshold of its seventh year,
for a recovery, but more signs are needed to
the war in neighboring Syria is increasingly being
reassure consumers and investors that the paths
perceived as a regional conflict that could degen-
to good governance, a saner fiscal policy, and a
erate into drawn-out confrontations.
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Dystopian geo-political
influences are still looming The corruption-induced
large on investment decisions, component of public
as the country’s economy expenditure is so large that its
remains severed from the swift elimination would reduce
regional economic expanse State spending to parity with the
that is so vital to its endurance. current level of public revenues.
Investment decisions have been affected nega- would reduce State spending to parity with the
tively by such perception and this has contribut- current level of public revenues.
ed to undermine growth prospects in Lebanon
and in most economies of the region. Recurrent business opinion surveys clearly point
to the view that, within the current economic
context, no public-policy decision would match
Public finances in its effect the positive impact that a drastic re-
Steering public finances along a saner path
duction in wasteful public spending would have
involves eliminating deficit spending by purging
on business confidence.
the State budget from wasteful public spending
and all forms of fraudulent misappropriation of
Balancing the State budget constitutes an inter-
public financial resources.
mediate policy objective within a comprehen-
sive and financially complex approach to thwart
The corruption-induced component of public
the explosive growth of the public debt, pend-
expenditure is so large that its swift elimination
ing recovery and the expansion of the tax base.
29
.. the absolute worst options
that could be taken involve Infrastructure building and reha-
allowing corruption to fester and, bilitation
concurrently, increasing tax rates While notionally, expenditure on infrastructure
building and rehabilitation lays the foundation
the incidence of which is grossly
for long-term economic growth, in the context
regressive and hence detrimental of Lebanon’s current fiscal muddle such expen-
to growth and stability. diture cannot be financed through additions to
the public debt. To be sure, the mess in public
finances is at a point on the curve where addi-
In the current state of public finances, the absolute tional large-scale public borrowing – even for in-
worst options that could be taken involve allowing frastructure building – would have a destabilizing
corruption to fester and, concurrently, increasing impact on the financial and monetary system.
tax rates the incidence of which is grossly regres-
sive and hence detrimental to growth and stability.
All signs are that these are the options presently
being contemplated, whereas just the opposite
While notionally, expenditure
fiscal measures are needed to spur growth. on infrastructure building
and rehabilitation lays
If tax rates were to be raised, the retail indus- the foundation for long-
try should brace itself for an extended period term economic growth, in
of stagnation, as the increased tax burden on
the context of Lebanon’s
households would exert strong downward pres-
sure on spending.
current fiscal muddle such
expenditure cannot be
financed through additions to
the public debt.
30
Policy-makers simply cannot

The much-delayed body of laws and regulations hope to induce growth just
on the public-private partnership for the financing by ‘talking up’ investment,
of large infrastructure projects has evidently con- consumption, and growth
tributed to the protracted economic slowdown.
through politicking and at no
Winning the battle against systemic corruption is
‘cost’ or trade-off.
the sine qua non for the success of the public-pri-
should not be ruled out as policy options, and
vate approach to financing large public projects.
certainly not on the pretext that public revenues
Certainly, lessons from other countries provide a
would diminish. On both the consumption and
warning that such approach inevitably degener-
the investment counts, much remains to be done.
ates into abject failure in countries where corrupt
governance prevails.
Consumption expenditure, which constitutes no
less than two thirds of Gross Domestic Product, is
Stimulating consumption and
investment constrained by policy-influenced psychological
A recovery-inducing tax plan needs to be drawn. and economic factors. Indeed, discontent and the
Policy-makers simply cannot hope to induce vast disparity in income and wealth distribution
growth just by ‘talking up’ investment, consump- are interlinked factors that account for the inse-
tion, and growth through politicking and at no curity of the Lebanese, and hence for restrained
‘cost’ or trade-off. household spending. In the latest international
report on happiness, Lebanon ranked 93rd of a
A reduction in the Value Added Tax (VAT) rate total of 157 countries for which the happiness
and significant incentives to capital investment index was constructed.
31
As for investment expenditure, Lebanon’s dismal to raise the target range for the federal funds rate
ranking on the ease of doing business acts as a by a quarter percentage point to a range of 0.5
strong headwind to fast-paced capital accumu- percent to 0.75 percent. By the same stroke, the
lation. discount rate was also raised by the same per-
centage to 1.25 percent.
Impactful exogenous factors
Four exogenously determined price categories In explaining and justifying the move, the FOMC
namely, interest rates, the U.S. dollar’s exchange reiterated its positive interpretation of U.S. em-
value, energy prices, and food prices, have a ployment data and its expectation that the rate
weighty impact on retail activity in Lebanon. Oth- of inflation is bound to edge back toward the
er equally important external factors that affect two-percent target rate it has set.
retail activity, such as the capital inflows and the
inflow of tourists, could to a varying extent be While markets and central bankers had, in
influenced by domestic policies, measures, and near-unanimity, anticipated this uptick in Fed
developments. funds rate, medium-term expectations remained
firm as to the persistence of a monetary policy
1. Interest rates are set to remain near their lows that is accommodative to banks’ need for low-in-
despite the latest U.S. decision to raise the fed terest Fed lending and liquidity.
funds rate and the discount rate.
The recent Fed move on the funds rate and the
In mid-December 2016, the U.S. Federal Reserve discount rate came a full year after a similar deci-
Bank’s Open Market Committee (FOMC) decided sion that had raised rates also by a smidgen 25 ba-
sis points in December 2015. The second upward
32
Implications of low-to-
revision of the rate in nearly a decade set off the
running joke that the rate was raised by naught
stable rates of interest on the
point something from naught point something retail scene in Lebanon are
to naught point something. Indeed, to borrowing momentous.
banks, rates remained practically unchanged from
their all-time low level. Added to this is the cryptic
major improvement in economic conditions and
assurance from the FOMC that future rate adjust-
that whatever improvement may occur would
ments will be just as trifling as the past two.
call for no more than a minor rate tweak provided
real rates of interest remain negative.
The stage was set for such a decision as buoyant
expectations were fueled by the new Admin-
An even stronger guidance to expectations was
istration’s announced intention to instigate a
expressed in the equally oblique phrasing that
sizeable fiscal stimulus as a means of moving
“the federal funds rate is likely to remain, for
the economy out of the low-growth period and
some time, below levels that are expected to pre-
into a long-winded expansion cycle. Equity-
vail in the longer run.” The equivocation in here
and bond-market strength also facilitated the
lies in the fact that long-term rate expectations
decision.
are referenced whereas Fed policy and state-
ments are in effect the prime influencers of these
In Fed talk, “economic conditions will evolve in a
expectations.
manner that will warrant only gradual increases
in the federal funds rate”, according to the FOMC
Implications of low-to-stable rates of interest on
official statement on the rate increase. This may
the retail scene in Lebanon are momentous.
be interpreted to mean that the Fed expects no
33
Expectations of relatively constant rates of inter- fiscal policy. However, the twin deficits should
est (a) have a direct bearing on the propensity be expected to continue exerting a dampening
of households to contract consumption credit; effect on the U.S currency’s exchange value. The
(b) stabilize the debt-service component within possibility of the new Administration adopting a
household budgets; (c) contribute to overall weak-dollar policy is yet another attenuating influ-
price stability by reducing business uncertainty ence on the dollar’s rate of exchange.
regarding the cost of credit; (d) stabilize the cost
of interest subsidies granted by monetary au- To the extent that a large proportion of Lebanon’s
thorities to the enterprise sector, and (e) retain imports are paid for with U.S. dollars, and given
the inflow-inducing interest differential without the dollar-Lebanese pound peg, a stronger dollar
unduly restraining growth. over the medium term contributes to the consoli-
dation of domestic price stability.
2. The U.S dollar’s exchange value strength-
ened in relation to nearly all major currencies in 3. Energy prices have picked up moderately –
November 2016 in the wake of the results of U.S. due to speculative rather than growth-induced
presidential elections, and staged a turn north- demand – after the Organization of the Petro-
wards in December 2016 following the Fed’s leum Exporting Countries (OPEC) agreed in
decision on interest rates. November 2016 to cut production by 1.2 million
barrels a day as from the first day of 2017.
The outlook for the U.S. currency rate of exchange
over the medium term obviously hinges on the The oil producers’ cartel also sought to get non-
new U.S. Administration’s successes in pushing OPEC producers to reduce production with a
forward a pro-growth, pro-business expansionary view to inducing a rise in prices.
34
However, a comprehensive analysis of the boosting impact on household spending as

metrics affecting oil prices sheds light on sup- energy outlays take up a substantial portion of
ply-side factors that would still apply a depres- household budgets.
sive impact on oil prices, even on the pious
assumption that producers would adhere to 4. Food prices
their share of the production cut. These factors
include oil producers’ inventory levels and draw-
downs, export policies, the current state of U.S.
energy production, and the new U.S. Adminis-
tration’s energy policy.
While a thorough supply-side analysis of these

factors lies beyond the ambit of the present
report, such analysis offers pointers that, over According to the food price index built by the
the shorter view, supply tightening will remain Food and Agriculture Organization (FAO), inter-
modest at best and oil prices will meet resistance national food prices staged an upturn in 2016,
at or near the upper bounds of $60-$65 to the but remained quite near the six-year low record-
barrel set in December 2016. Only a sustained de- ed in January of that year. On a yearly average
mand-side pull will break these resistance levels basis, the 2016 index remained 2.07 percent
and set a higher equilibrium trading range. lower than its previous year’s level. In the period
2013 to 2016, the index fell by a cumulative 24.7
In Lebanon, relatively lower energy prices over percent.
the past 30 months should have had a stronger
35
Other key variables
1. The Consumer Price Index
In 2016 as a whole, the CPI rose by 3.14 percent.

The “old rent” component of the CPI registered
Twenty sixteen was the year when the Consumer
the broadest advance as it ended the year up
Price Index (CPI) staged a clear upturn – albeit
15.34 percent. The “clothing and footwear”
a relatively restrained one – that came after a
component of the index rose by 10.37 percent,
two-year decline. As a matter of fact, by January
the second largest increase for the year. The price
2016 when the CPI reached its lowest level for
index for the “housing water, electricity, gas and
the period 2014-2016, the index had fallen by a
other fuels” component of household budgets
cumulative 6.79 percent from its January 2014
rose by 5.81 percent, in line with slightly higher
level. In the eleven months to December 2016,
international energy prices.
the CPI rose by a cumulative 5.17 percent. In that
eleven-month period, the index marked an uptick
in each month bar one.
36
2. Tourism recorded in the year before, 24.63 percent more

Monthly data on the numbers of incoming than 2014 tourist arrivals, and 32.49 percent more
tourists show a clear four-year-long uptrend with than 2013 arrivals.
successively higher seasonal highs and higher
The monthly average tourist arrivals rose by 11.23
seasonal lows. Thus, the July 2016 seasonal peak
saw the number of incoming tourists reach a
four-year record high of 232,708 that is 11.51 per-
cent higher than the July 2015 seasonal peak and
44.34 percent higher that the July 2014 seasonal
peak.
percent in 2016 compared with a rise of 12.05

percent in 2015 and 6.3 percent in 2014.
Of total tourist arrivals over the past four years,

the median share of tourists coming from Europe
was 33.36 percent and that of Arab tourists was
31.61 percent.
Tourist arrivals in 2016 totaled 1.69 million, that
is 11.23 percent more than the number of arrivals
37
3. Imports
Reflecting stagnant aggregate demand, the value
of imports rose by a modest 3.53 percent in 2016,
but remained noticeably below levels reached in
the years of high economic growth. The uptick
broke a three-year stretch during which the value
of imports declined by a cumulative 15.09 per-
cent from their 2012 level.
Tourist-generated demand being one of the de-

terminants of retail sales, a significant correlation
was found between the inflow of tourists and
the sales indicator for hospitality services, with a
coefficient of determination of 0.57.
38
In 2016, the value of imports totaled $18.7 billion,

down a cumulative 12.1 percent from their level
in 2012.
39
40
The Indicators
Monthly evolution of retail sales indicators
in the second half of 2016
Quarterly evolution of retail sales indicators
in the second half of 2016
Half-yearly evolution of retail sales indica-
tors
Yearly evolution of retail sales indicators
41
III.A- Monthly evolution of retail for the nine categories of consumer goods and
sales indicators in the second half services rose by 19.92 percent in July 2016. The
overall indicator then moved down in each of the
of 2016
four months that followed. In that move, the
indicator wiped out all the gains and then some
A short-lived July surge Retail sales started the
and hit the year’s lowest level by November as it
second half of 2016 on a strong footing. The retail
dipped 21.79 percent compared with the July peak.
sales indicators of nearly all categories of goods
and services covered by the report staged a
That indicator had drawn a fairly similar pattern
marked increase in July 2016 compared with their
in the year 2015 and 2013 as it had gained 18.45
previous month’s level. The July 2016 rise in retail
percent in 2015 and 14.49 percent in 2013 and
sales indicators mirrors the sales performance
fallen in the subsequent four months.
recorded in the months of July of 2015 and 2013.
On a month-to-month basis, the overall indicator
42
On a year-to-date basis, the overall sales indicator

was down 5.1 percent and 7.73 percent respec-
tively in July and August 2016 compared with the
level it had reached in the same months of the
previous year. That indicator was higher in the
three months to November compared with the
corresponding months of the previous year.
The pattern outlined by the overall indicator was

more or less closely replicated in the indicator
data for six of the nine retail sales categories
covered by the report namely, the clothing, food
and beverages, luxury goods, sports and hobbies III.A.1 – Clothing and fashion
goods, hospitality services, and medical services.
A noticeable number of sub-categories also fol-
lowed the same pattern..
The overall retail sales indicator followed the

December surge pattern recorded in previous years
as it shot up by a steep 55.58 percent in December
2016 from its previous month’s level. However, the
year-to-date comparison shows that index at a level
4.71 percent below that of December 2015.
43
The retail sales indicator for clothing and fashion On the year-to-date count, the sales indicator for
followed nearly the same pattern as that traced by clothing was in negative territory for nine months of
the overall indicator, as it moved up on a month- 2016, including the month of December when it was
to-month basis by 22.6 percent in July 2016, but 5.56 percent lower than its December 2015 level.
retreated just as steeply in the four months that fol-
lowed. By the end of November, that indicator was On a month-to-month basis, the sales perfor-
down by a broad 29.11 percent from its July level. mance indicator for clothing and fashion was
62.58 percent higher in December 2016 com-
pared with its level in the preceding month.
The clothing and fashion category includes the

seven sub-categories of men’s wear; women’s wear;
women’s accessories; children’s wear; shoes; appar-
el; and fabric and sewing.
III.A.2– Food and beverages

The year-to-date change in the sales indicator for
the clothing and fashion category also reflected a
better performance in the month of July 2016. That
indicator rose by 2.59 percent in July 2016 com-
pared with its level in the corresponding month of
2015, its broadest year-to-date gain in 2016.
44
The July pattern was less pronounced in the food In December 2016, the sales indicator for food
and beverages sales indicator, which rose by a and beverages was 11.4 percent higher than its
comparatively moderate 7.14 percent in July December 2015 level. That was the best perfor-
2016 then fell back by a combined 6.15 percent mance, on a year-to-date basis, among the nine
in the subsequent four-month period. retail categories examined in the report. Com-
pared with its level in the preceding month, the
On a year-to-date basis, that indicator was up in sales indicator for food and beverages rose by a
every single month of 2016 compared with the broad 65.03 percent in December 2016.
corresponding month of the previous year. This
is clearly reflected in the chart tracing the indica- The food and beverages category comprises the five
tor’s year-to-date change. Thus, in the second half sub-categories of supermarkets; confectionery; bak-
of 2016, the broadest year-to-date gain regis- eries; various food stores; and alcoholic beverages.
tered for the food and beverages indicator was
recorded in the month of August with a 21.53 III.A.3- Cosmetics
percent increase compared with the same month
of the year before.
45
The sales indicator for the cosmetics category of The year-to-date indicator comparisons point
retail was up by 22.91 percent in July 2016, but to a differing narrative, where the month of
that was not its biggest climb of the second half of September 2016 saw the index at a level 59.07
2016. As a matter of fact, that indicator fell back by percent higher than that of the corresponding
20.02 percent in following month, traced a sharp month of the year before, the year’s record high
rebound of 28.92 percent in September only to on that count.
fall back again by 31.48 percent in November. The
month-to-month comparison showed that indica- On a year-to-date comparison, the indicator for
tor 40.03 percent higher in December 2016. December 2016 was down 24.07 percent from
its December 2015 level, the broadest decline
The broad swings are typical of the cosmetics sales registered among retail categories examined in
indicator, which has steadily followed a compara- the report.
tively different and more erratic pattern of fluctua-
tions compared with other retail categories. The cosmetics category of retail includes three
sub-categories namely, perfumes, cosmetics,
and personal care products.
46
III.A.4– Household goods
The year-to-date comparisons again deviate from

The sales indicator for household goods also de- the pattern set by the month-to-month compari-
viated from the July surge pattern. On a month- sons. On a year-to-date basis, the indicator remained
to-month basis, that indicator moved up by a in the positive space in the first five months of 2016
moderate 3.27 percent in July 2016. In November, and subsequently moved to the negative space for
the indicator rose by 12.65 percent then in De- the subsequent six months. In December 2016, the
cember it registered its best performance of 2016 indicator was 8.62 percent higher than its level in the
when it rose by 60.97 percent. corresponding month of the previous year.
Items grouped under the household goods category

of retail fall under the following eleven sub-categories:
sanitary; glass, paint, and wallpaper; hardware; furni-
ture; floor covering; drapery and upholstery; various
home furnishing; household appliances; audio-visual;
antiques restoration; and crystal and glassware.
47
III.A.5– Luxury goods egory of retail more than doubled in December
2016 as it rose by 113.67 percent from its previ-
ous month’s level.
The sales indicator for luxury goods restrainedly

reflected the July surge pattern. That indicator The pattern drawn by the year-to-date compar-
rose by 8.1 percent in July 2016 and extended the isons is one of an indicator that was in negative
rise, albeit at the lower rate of 6.89 percent in the terrain for eight months of 2016, and six of
month that followed. The subsequent two months these months – including December – were in
saw that indicator fall by a combined 19.76 per- comparatively deeper negative layers as shown
cent, followed by a rise of 8.05 in November. in the chart mapping the year-to-date change.
The December sales indicator for that category
The December pattern was marked in the luxury was down 8.2 percent from its level in the corre-
items category. The sales indicator for that cat- sponding month in 2015.
48
Seven sub-categories are included in the luxury

items category of consumer goods; these are:
jewelry, watches, and silverware; crafts; art dealers
galleries; florists; cigars; gifts; and electronics.
III.A.6– Sports and hobbies goods
On a year-to-date basis, the indicator remained

positive in each of the three months forming the
third quarter of 2016 and negative in the two
months that followed. In December, that indica-
tor was 6.82 percent higher than its December
2015 level.
The sports and hobbies category represents three

Sports and hobbies items saw their sales indica- sub-categories of consumer goods: sporting goods;
tor rise by a significant 19.03 percent in July 2016. games and toys; and music instruments.
This was followed by a combined fall of 12.65
percent in the following two months, a rise of
8.24 percent in October, and a fall of 2.24 percent
in November.
49
III.A.7- Hospitality services had fallen by 51.39 percent from its July level. In
the month of December, the indicator staged a
The pattern of the July 2016 upswing and the broad rise of 64.37 percent.
broad decline in the succeeding four months
was most pronounced in the sales indicator for
hospitality services.
On a year-to-date basis, the July 2016 surge

propelled that indicator to a level that was 10.35
On a month-to-month basis, that indicator percent higher than that of the same month of
recorded the broadest increase in July in compar- the previous year. The August indicator for that
ison with indicators for other retail categories. In category of retail was 10.08 percent lower than its
that month, it surged by 78.24 percent from its year-to-date level. Subsequent months saw that
previous month’s level. That indicator’s striking indicator move moderately higher in comparison
move, however, was reversed in the subsequent with the same months of the year before.
four months. By the end of November, that metric
50
In December, the sales indicator for hospitality month decline occurring in September when
services fell 8.9 percent short of its December that indicator was down 13.35 percent. By
2015 level. the end of November, the indicator was 23.27
percent lower than its end June level. December
Hospitality related services include four sub-catego- witnessed a relatively moderate 13.84 percent
ries: catering; restaurants; pubs and nightclubs; and improvement in that indicator.
hotels and resorts.
III.A.8- Tourism services
On a year-to-date basis, the sales indicator for

tourism services in each of the three months
from July to September 2016 was markedly
lower than the corresponding months of the
year before, whereas October and November
The sales indicator for tourism services moved
were markedly higher than the same months of
down in each of the five months from July to
2015.
November 2016, with the largest month-to-
51
In December, the sales indicator for tourism III.A.9- Medical services
services was 22.19 percent lower that its Decem-
ber 2015 level, the second broadest year-to-date The sales indicator for medical services traced
decline among retail categories covered. the observed pattern of a July surge followed by
subsiding move in the subsequent four months.
The tourism category of retail includes six sub-catego- In July 2016, the indicator was up 20.99 percent
ries; these are: travel agencies; travel services; movies from its previous month’s level. In the ensuing
and theaters; dance halls and studios; tourist attrac- four months, that indicator alternated rises and
tions; and clubs. falls and in December it moved up 11.26 percent.
The year-to-date comparison has that indicator

falling moderately in July and August 2016 from
the levels of the same months of the previous
52
year. The subsequent three months saw the

indicator for sales of medical services moderately
higher than their year-before levels. In December,
the indicator was 7.12 percent higher than its
level in the same month of 2015.
The medical services category includes five sub-cat-

egories. These are the services of: doctors; dentists;
optometrists and ophthalmologists; hospitals; and
The overall quarterly sales indicator for the
other health and medical facilities.
nine categories of consumer goods and services
moved downwards by 0.86 percent in the fourth
III.B- Quarterly evolution of retail
quarter of 2016. In that period, the sales indica-
sales indicators in the second half tors for five of the nine categories of retail were
of 2016 lower than their previous quarter’s level.
A quarter-to-quarter comparison shows a min-

imal decline in the fourth quarter retail sales In the third quarter of 2016, the overall indicator
indicator, which followed a marked rise in the rose by 12.86 percent compared with its previ-
indicator for the third quarter. ous quarter’s level. In that quarter, eight of the
nine categories of consumer goods and services
recorded an advance. Only the indicator for retail
sales of tourism services posted a moderate
decline.
53
Over the four-year period covered by the III.B.1 – Clothing and fashion
present exercise, the overall third-quarter
indicator has consistently shown a more or
less significant increase as compared with its
second-quarter level. Thus, in 2015 the third
quarter indicator was 14.62 percent higher
than its previous quarter’s level, in 2014 it was
4.5 percent higher and in 2013 it was 9.62 per-
cent higher.
A year-to-date quarterly comparison, howev-

er, shows a minimal increase of 0.4 percent
in the fourth-quarter overall indicator as On a quarter-to-quarter basis, the sales indicator
compared with its level in the corresponding for the clothing and fashion category of retail
period of 2015. was down 2.54 percent in the fourth quarter of
2016. This decline came in the wake of significant
By that comparison, the third quarter overall sales increase of 11.91 percent posted in the third
indicator was down 2.31 percent. quarter of the year, the broadest quarter-to-quar-
ter gain registered by that indicator in the four
years covered by the present exercise.
A year-to-date comparison saw the fourth-quar-

ter clothing and fashion sales indicator 7.24
54
percent lower than its level in the corresponding In a year-to-date comparison, the sales indica-
period of 2015. That indicator was also down tor for food and beverages was up 9.98 percent
0.41 percent in the third quarter of 2016 com- in Q4-2016 and up 14.23 percent in Q3-2016
pared with the level it had reached in the corre- compared to the corresponding periods of the
sponding quarter of the previous year. preceding year.
III.B.2– Food and beverages
III.B.3- Cosmetics
The sales indicator for food and beverages rose The sales indicator for cosmetics declined no-
by 14.73 percent in the fourth quarter of 2016 as ticeably in the fourth quarter of 2016 compared
compared to its level in the preceding quarter. with its previous quarter’s level as it fell by 17.72
And in Q3-2016 that indicator increased by 7.63 percent. That indicator posted a 9.66 percent rise
percent from its level in the preceding quarter. in Q3-2016 from its Q2-2016 level.
55
In a year-to-date comparison, the sale indicator for cent lower in Q3-2016 than its level in the corre-
cosmetics was 17.72 percent lower in Q4-2016 than sponding quarters of the previous year.
its Q4-2015 level. In Q3-2016 that indicator rose by
4.05 percent in as compared with its Q3-2015 level. III.B.5– Luxury goods
III.B.4– Household goods
The sales indicator for luxury goods moved up by

a marked 23.29 percent in Q4-2016 and by 10.67
On a quarter-to-quarter basis, the sales indicator percent in Q3-2016, as compared to the respec-
for household goods rose by 13.75 percent and tive preceding quarters.
by 8.64 percent respectively in the fourth and
third quarters of 2016. The year-to-date comparison showed that indi-
cator move down 3.05 percent and down 3.86
In a year-to-date comparison that indicator was percent in Q4-2016 and Q3-2016 respectively.
1.27 percent higher in Q4-2016, but 10.01 per-
56
III.B.6– Sports and hobbies goods same periods of the previous year. Thus, the indi-
cator was 2.36 percent higher in Q4-2016 and 5.33
In the fourth quarter of 2016, the sales indica- percent higher in Q3-2016 on a year-to-date basis.
tor for sports and hobbies goods recorded the
broadest quarter-to-quarter advance as it was up
III.B.7- Hospitality services
56.1 percent.
The sales indicator for hospitality services surged

The sales indicator for that category of retail was
by 50.71 percent in the third quarter of 2016 as
10.09 percent higher in the third quarter of 2016
compared to the previous quarter’s level, but fell
than its previous quarter’s level.
back by 29.38 percent in the fourth quarter.
That indicator also showed advances when its

On a year-to-date basis, that indicator rose by a
quarterly levels were compared with those of the
minimal 0.53 percent in Q3-2016 and declined by
57
a minimal 1.22 percent in Q4-2016 in comparison compared with its Q4-2015 level. In Q3-2016 that
with the levels it was at in the same quarters of indicator dropped by the broadest margin on a
the year before. year-to-date basis, as it was diminished by 19.69
percent in comparison with its Q3-2015 level.
III.B.8- Tourism services
In a quarter-to-quarter comparison, the sales indi- III.B.9- Medical services

cator for tourism services fell by 11.6 percent in the
In Q3-2016, the sales indicator for medical ser-
fourth quarter of 2016. In the preceding quarter,
vices climbed 16.52 percent from its previous
that indicator registered the only drop among the
quarter’s level and moved down a trifling 0.11
nine indicators as it declined by 7.13 percent.
percent in Q4-2016.
The sales indicator for this category of retail

On a year-to-date basis, however, the Q4-2106 sales
services edged up 1.44 percent in Q4-2016
indicator for that category of retail was up 10.76 per-
58
cent on its Q4-2015 level. In Q3-2016 the indicator

had retreated by 3.14 percent from its Q3-2015 level.
III.C- Half-yearly evolution of retail

sales indicators
In the second half-year of 2016, the sales indica-
tors for eight of the nine categories of consumer
goods and services included in the present report
posted gains on both the period-to-preced-
ing-period and the year-to-date comparisons.
The sales indicator for tourism services was the Judging by the second half-year 2016 indicator
sole decliner on both modes of comparison. metrics alone, and within the report’s data sets,
retail sales have generally fared better than previ-
Influenced by the December surge, the overall ous corresponding periods. However, two major
retail sales indicator is invariably higher in the caveats remain: (a) H2-2016 is but one data point
second half-year as compared to the preced- in this context and it is hence too early to detect
ing half-year. The more expressive measure of a sustainable upturn, and (b) the yearly sales
momentum, therefore, involves a comparison indicator metrics are still inconclusive as to the
of the extent to which the sales indicator rose in formation of an uptrend.
corresponding second-half-year periods of previ-
ous years and the extent to which first-half-year The overall sales indicator for the exercise’s nine
periods declined in previous years. retail categories was up 15.02 percent in the sec-
59
ond half of 2016 as compared with the previous On a year-to-date basis, the sales indicator for that
half-year period. category of retail rose by 3.61 percent compared
with its level in the second half year of 2015.
Compared with the corresponding half year of
2015, that indicator was 6.41 percent higher in III.C.2– Food and beverages
the second half year of 2016.
The sales indicator for food and beverages for

III.C.1 – Clothing and fashion
the second half of 2016 moved up 16.35 percent
The sales indicator for clothing and fashion rose from its level in the previous half-year period.
by 14.13 percent in the second half of 2016
compared with its level in the preceding half-year In a year-to-date comparison, that food and bev-
period. In the first half of the year, that indicator erages sales indicator was 22.78 percent higher in
had fallen by 9.22 percent. the second half of 2016 compared with its level in
the corresponding period of the preceding year.
60
III.C.3- Cosmetics
III.C.4– Household goods

The retail sales indicator for cosmetics rose by
22.28 percent in the second half of 2016 in com- On a period-to-previous-period count, the
parison to its level in the preceding half-year. That retail sales indicator for household goods rose
indicator had fallen by 15.16 percent in the first by 21.46 percent in the second half of 2016
half of the year. following a 16.32 percent fall in the first half of
the year.
The sales indicator for cosmetics rose by 3.75 per-
cent in H2-2016 compared with its H2-2015 level. The year-to-date change in that indicator was less
ample it moved 1.64 percent higher in H2-2016
from its H2-2015 level.
61
III.C.5– Luxury goods III.C.6– Sports and hobbies goods
The sports and hobbies sales indicator recorded

The sales indicator for luxury goods increased the broadest advance in the second half of 2016
markedly in the second half of 2016 compared on both modes of comparison. Compared with its
with its level in the preceding half year; it rose by level in the previous half-year period, that indi-
25.23 percent following a decline of 8.3 percent cator was 31.4 percent higher in H2-2016; and it
in the first half of the year. was 30.1 percent higher than its level in H2-2015.
The sales indicator for that retail category was

14.84 percent higher in H2-2016 than its H2-2015
level.
62
III.C.7- Hospitality services III.C.8- Tourism services

The sales indicator for hospitality services ad- The second half-year retail sales indicator for
vanced by 26.51 percent in the second half of tourism services recorded the sole decline in that
2016 compared with its previous half-year’s level, period as it slid 11.05 percent from its level in the
the second broadest advance in that period. preceding half year and was 8.32 percent below
However, that advance came after a decline of its level in the second half of the previous year.
18.25 percent in the first half of the year, the
broadest decline in that period.
On a year-to-date count, the sales indicator for

that category of retail services was up 3.42 per-
cent in H2-2016 compared with its H2-2015 level.
III.C.9- Medical services

The retail sales indicator for medical services was
10.02 percent higher in the second half of 2016
compared to its level in the first half of the year.
63
This advance followed a decline of 5.77 percent in carried the overall yearly sales indicator into neg-
the H1-2016 indicator. ative – albeit shallow – layer.
Compared with its H2-2015 level, the H2-2016 The overall retail sales indicator for the nine
sales indicator for that category of retail was 3.67 categories of goods and services was down 0.75
percent higher. percent in 2016.
The overall retail sales indicator for 2016 re-

mained 10.23 percent below its base year level.
Of the nine categories of consumer goods and

services included in the report, six saw their
sales indicators decline in 2016.
III.D- Yearly evolution of retail

sales indicators
The second half of 2016 may have given faint
signs of improved retail sales performance, but
the dismal numbers of the first half of the year
64
III.D.1- Clothing and fashion III.D.3- Cosmetics

The sales indicator for the clothing and fashion
category of retail declined by 5.62 percent in 2016
and remained 32.52 percent below its 2012 base
level. As shown in the chart tracing the yearly
evolution of that indicator, the metric was down
for four years in a row, with a sharp decline in 2013
followed by steadier rates of decline thereafter.
The sales indicator for cosmetics was down by 1.88

percent in 2016 following a broad rise in 2015 and
a moderate one in 2014. In 2016, that indicator
was 10.32 percent higher than its 2012 base level.
III.D.2– Food and beverages

The sales indicator for food and beverages re-
flects a sharp three-year long rebound following
an even sharper fall in 2013. That indicator rose
by 14 percent in 2016, but remained 5.28 percent
below its 2012 base year level.
65
III.D.4– Household goods III.D.6– Sports and hobbies goods
The sales indicator for household goods was 1.5
percent lower in 2016. In four consecutive yearly
declines, that indicator fell to 34.98 percent
below its base year level, the second broadest
negative gap among the nine retail indicators of
the report.
Tracing a broadly comparable path to that of the

sales indicator for luxury goods, the sales indica-
tor for sports and hobbies goods remained near
the lows reached after the steep fall of 2013. In
2016, that indicator rose by 4.12 percent, but re-
mained 36.11 percent below the base year level.
III.D.5– Luxury goods
The sales indicator for luxury goods was 6.11 per-
cent lower in 2016 and remained at 40.08 percent
below the 2012 base year level, the broadest nega-
tive gap from base. As the chart reveals, that indica-
tor failed to recover from the steep fall in 2013.
66
III.D.7- Hospitality services III.D.9- Medical services

The retail sales indicator for hospitality services
retreated by 3.8 percent in 2016 and remained
0.49 percent short of the 2012 base year level.
III.D.8- Tourism services
The sales indicator for medical services also

presented a distinct evolution pattern as it rose
at a near-steady rate and stood at a level 40.04
The retail sales indicator for tourism services devi-
percent higher that the base year level. In 2016,
ates from the pattern traced by other sales indica-
that indicator rose by 3.65 percent.
tors computed for the report. That indicator fell
8.73 percent in 2016, the broadest decline for the
year. The plunge follows three consecutive yearly
advances. For four consecutive years, the sales
indicator for tourism services remained above the
2012 base year level; in 2016, that indicator was
seven percent higher than the base.
67
Quarter-to-quarter change of retail sales indicators by category
Q1-2016 Q2-2016 Q3-2016 Q4-2016
Clothing -20.39% 6.83% 11.91% -2.54%
Food & beverages -12.15% 1.39% 7.63% 14.73%
Cosmetics -38.65% 57.55% 9.66% -17.72%
Household goods -25.27% 9.66% 8.64% 13.75%
Luxury items -30.84% 2.74% 10.67% 23.29%
Sports & hobbies -31.75% -12.73% 10.09% 56.10%
Hospitality -4.18% -3.14% 50.71% -29.38%
Tourism 19.48% 3.42% -7.13% -11.60%
Medical services 6.29% -10.47% 16.52% -0.11%
All nine categories -14.40% 4.82% 12.86% -0.86%
Year-to-date quarterly change of retail sales indicators by category

Q1-2016 Q2-2016 Q3-2016 Q4-2016
Clothing -7.08% -7.91% -0.41% -7.24%
Food & beverages 20.89% 12.51% 14.23% 9.98%
Cosmetics -13.01% 12.98% 4.05% -12.79%
Household goods 5.37% -0.54% -10.01% 1.27%
Luxury items -4.31% -13.64% -3.86% -3.05%
Sports & hobbies 12.43% -2.49% 5.33% 2.36%
Hospitality 2.08% -16.52% 0.53% -1.22%
Tourism -20.38% 12.10% -19.69% 1.44%
Medical services 16.19% -6.94% -3.14% 10.76%
All nine categories -0.17% -0.78% -2.31% 0.40%
68
69
70
The Analysis
Seasonally adjusted retail sales indicators:
the rationale
Seasonally-adjusted retail sales indicators:
the data
Trend analysis
The moving average approach
71
VI.A. Seasonally adjusted retail these blurring factors and lays bare the stabler
sales indicators: the rationale vector underlying the period-to-period evolu-
tion of the indicator data namely, the trend.
The de-seasonalization of retail sales indicators,
which adds another statistical processing stage Detecting the trend that underlies data
to index building, constitutes the basis for trend fluctuation has momentous implications on
detection and analysis. business decision-making as well as statistical
analysis.
In their elementary form, retail sales indicators
necessarily embody irregular, short-lived, non- At the retail enterprise level, the time series of
trend-forming peaks and troughs of various de-seasonalized sales indicators offer retailers an
magnitudes as well as seasonally-determined invaluable benchmarking reference.
patterns. While the erratic fluctuations may be
attributed to the numerous factors that influ- Equally crucial to data analysis is the fact that
ence the retail industry as a complex system, the seasonally-adjusted time series of retail indica-
seasonal patterns of activity are more predict- tors are more accurate descriptors of trend-for-
able. However, both the seasonal influences mative fluctuations, and the derived trend con-
and the more fickle fluctuations contribute to stitutes a more solid foundation for acceptable
blurring the underlying, more stable evolution forecasts.
of indicator data.
When applied to elementary indicator metrics,

the seasonal adjustement process eliminates
72
Seasonally-adjusted retail sales

indicators: the data
IV. A. 1- The overall sales indicator
IV. A. 2- Clothing and fashion

The seasonally-adjusted sales indicator data for
By ironing out moves detemined by seasonal the clothing and fashion sector of retail shows an
factors and other varying influences, the de-sea- unremitting downward move over the 48-month
sonalization of the 48-month-long time series of period analyzed in the exercise. In the monthly
the overall sales indicator reveals a pattern that indicator data, the recurring twin annual surges
is mostly dissimilar from that traced by the basic, in July and December help conceal the negative
non-seasonally-adjusted data. Months of peak and trend that formed throughout four years of con-
trough sales performance are more often than not tinuous decline.
at variance in the two data sets, and plainly the
adjusted data reflect the fact that the trend for the Pointing to a comparatively strong seasonality
overall sales indicator remained near-flat in the 18 influence in the basic indicator data, the de-sea-
months to end December 2016. sonalized series exhibited a 57.12 percent nar-
73
rower range of fluctuations and a 53.14 percent For the seasonally-adjusted indicator data, the
lower standard deviation compared with the fluctuations margin was 46.37 percent narrower
corresponding metrics for the basic data. and the standard deviation was 38.5 percent lower
than the corresponding metrics for the basic data.
IV. A. 3- Food and beverages

The seasonally-adjusted sales indicator for food
IV. A. 4- Cosmetics
and beverages ironed out the recurring Decem-
ber surges, but otherwise closely tracked the The seasonally-adjusted sales indicator for cos-
upward move of the basic, non-adjusted sales in- metics closely replicated the ample and pattern-
dicator. This is a reflection of the fact that over the less fluctuations and the sideways movement
three-year period 2014-2016, the sales indicator traced by the basic indicator data. This normally
for that category of retail moved up at a steady occurs when the basic series show no recurring
pace, bar the December surges. seasonal pattern, a feature that accounts for the
fact that the de-seasonalization of the data only
74
minimally reduced the range of fluctuations and The weight of the December surges within the
the series’ standard deviation. As a matter of fact, time series is reflected in the extent to which
the seasonal adjustment process reduced the the range of fluctuations of the de-seasonalized
range of fluctuations in that series by a compar- indicator data is narrower than that of basic data.
atively modest 18.64 percent and reduced the On that count, the seasonally-adjusted indica-
standard deviation by 32.74 percent. tor data had a 67.56 percent narrower range of
fluctuations and a 61.65 percent lower standard
IV. A. 5- Household goods deviation than the basic data.
The December surges constitute the weightiest

seasonal influence within the household goods
IV. A. 6- Luxury items
sales indicator series. These surges failed to stem Following roughly the same pattern of season-
the underlying downtrend of the 2014-2016 ality, the seasonally-adjusted sales indicator for
three-year period. luxury goods ironed out the December surges
75
and tracked more or less tightly the fluctua- IV. A. 7- Sports and hobbies goods
tions traced in the remainder 44 months of
the period covered by the exercise. Again, the Similarly, the time series for the sales indicator of
influence of the December peaks is expressed sports and hobbies goods presented a pattern
in the extent to which seasonal adjustment that resembled closely the series for luxury goods
reduces the range of fluctuations. By that and those for household goods. Thus, when a
measure, the seasonally-adjusted indicator strong seasonal influence exerted by the Decem-
data fluctuated within a range that was 77.72 ber surges is de-seasonalized, the adjusted indica-
percent narrower than that of basic data and tor series’ scope of fluctuations was 74.01 percent
the adjustment process reduced the standard lower than that of the basic data and the adjusted
deviation by 75.99 percent. series’ standard deviation was 75.21 percent lower.
IV. A. 8– Hospitality services
76
The sales indicator for hospitality services presents IV. A. 9– Tourism services
a distinct and recurring July upswell, albeit more
subdued than the December surges that char- The tourism services sales indicator series, which
acterize indicator data of other retail categories. exhibit fairly weak seasonal influences, are thus
Consequently, the comparatively weaker seasonal moderately affected by seasonal adjustement.
influence is reflected in the fact that data de-sea- Still, the downtrend of the 20 months to end
sonalization leads to a comparatively more lim- 2016 was made more distinct by the de-seasonal-
ited reduction in fluctuation range and standard ization of indicator data.
deviation. Accordingly, the fluctuation margin of
seasonally-adjusted indicator data is 51.56 percent Reflecting the weak seasonal factors, the breadth
narrower than that of basic data and the standard of fluctutations of the adjusted indicator data was
deviation is 56.25 percent lower. 26.36 percent narower than that of basic data and
the standard deviation was 30.06 percent lower.
77
IV. A. 10– Medical services probable they will meaningfully ‘fit’ into
– or be represented by – a stylized, linear
Likewise, the medical services sales indicator approximation. (Think of the inadequacy
series present no signs of strong seasonal influ- of having a flat trend-line representing a
ences at play. The de-seasonalized series show a long-haul V-shaped curve.)
steady-paced uptrend and a limited reduction in c. in longer time series, changes in vector
fluctuation range (-22.48 percent) and standard direction, which are captured on by the
deviation (-24.98 percent) compared to the basic locally weighted fit, delimit the phases
indicator series. of data evolution and thus open the
path to phase analysis.
IV. B. Trend analysis
For longer time series, the locally weighted fit
constitutes a superior, more precise and detailed
rendition of the trend than the linear alternative.
Three characteristics account for the advantages
of adopting the locally weighted fit to express
the trend:
a. this non-linear expression of the trend
offers precious statistical information
as it captures the major inflection
points in the time series as well as out-
right changes in vector direction;
b. the longer the time series the more im-
78
The overall retail sales indicator

The seasonally-adjusted sales indicator for all nine
categories of goods and services traces a mildly
positive linear trendline with a gradient of +.2
The more advanced expression of the trend re-

veals a more nuanced, three-phased evolution of
the indicator. The locally weighted fit thus shows
a mild decline of the indicator in 2013 followed by
a phase of moderate upturn that ended in mid-
2015, then a third phase of mild decline again.
The seasonally-adjusted sales indicators for the
clothing and fashion and for the household
Applying the advanced statistical tool made it
goods categories of retail traced a clear negative
possible to reach the correct conclusion that the
trend throughout the data series.
overall sales indicator has indeed failed to main-
tain a positive trend.
Clothing and fashion
Retail sales indicator data for clothing and
IV. B. 1- Retail sales indicators fashion drew a steady downward sloping trend
showing a negative trend throughout the four-year period covered by the
report. The linear trendline is moderately inclined
at a gradient of -.35
79
The locally weighted fit similarly shows a steadily IV. B. 2- Retail sales indicators
declining trendline with no inflection points. showing a flat or near-flat trend
Four retail categories exhibited a flat or near-flat
overall trend. The non-linear, locally weighted fit
showed that the four categories shared the com-
mon feature of having failed to maintain the posi-
tive momentum observed prior to 2016. Hence,
indicator data for all four categories presented a
negative trend in the 2016 portion.
Cosmetics
Household goods
With a gradient of -.21, the linear trendline for
household goods indicator data is mildly negative.
The locally weighted fit reveals a phase where the

trendline’s slope was positive. This was followed
by sharp downturn in 2014 and a gentler slide
thereafter.
80
The linear trend for the cosmetics sales indica- The linear trend describing the sales indicator
tor data shows a positive slope of +.41 , which data for luxury goods is practically flat with a
should have customarily placed this category slope of +.05
of retail among those that exhibited a positive
trend throughout the four-year period under The locally weighted fit once again offers a more
review. However, the locally weighted fit again thorough, three-phased description of the indica-
conveys a usefully nuanced picture of a phase of tor data, thus providing an even clearer example
mild downward sloping trend in 2013 followed of the limitations of the linearity notion in trend
by a two-year long mildly ascending slope, then analysis.
another trend reversal in 2016.
Luxury goods Hospitality services
81
With a slope of +.12 , the linear trend related to V. B. 3- Retail sales indicators
the indicator data for hospitality services misses
showing a positive trend
the three-phased trend evolution that the locally
weighted fit conveys. In effect, the non-linear The sales indicator data for three categories of
trendline shows a downward sloping portion fol- retail followed a distinctly positive trend in the
lowed by a rebound then a sideways 18-month- four-year period of the data sets.
long move till end 2016.
Food and beverages
Tourism services
The linear trend for food and beverages sales in-

The linear trend for the tourism services indicator dicator data showed a strong ascent with a slope
data near flat with a slope of +.17 of +.74 , the steepest among the nine categories
The non-linear trend for this category, however, of consumer goods and services examined in the
reveals a two-year nearly steady upward move report.
followed by a two-year slide.
82
The locally weighted fit nuanced the picture by Medical services

showing a mild downward move in 2013 fol-
lowed by a steady and comparatively steep rise
thereafter.
Sports and hobbies goods
With a slope of +.57 , the linear trend for medical

services sales indicator data presented the sec-
ond steepest ascending trend among the exer-
cise’s nine categories of goods and services.
The sales indicator data for sports and hobbies

No portion of the non-linear trendline for that
traced a linear trend with a slope of +.3
category showed a descent, a unique feature
among the report’s nine retail categories.
The data’s non-linear trend shows a slide in 2013
followed by a sturdy ascent in the subsequent
two years and a milder ascent in 2016.
83
IV. C. The moving average approach The moving average approach applied to the
overall retail sales indicator roughly replicated
the non-linear trendline expressed by the locally
The moving average completes the trend analysis in
weighted fit. However, the latter proved more
that it constitutes an accurate descriptor of change
sensitive to the trend’s inflection points.
in time series. Evidently, the moving average line
replicates the trendline and, like the seasonally
adjusted data line, its smoothes out fluctuations.
As time series lengthen, the moving average met-

rics gain in relevance and usability.
IV. C. 1- Clothing and fashion

Applied to sales indicator data for the clothing
and fashion category of retail, the moving aver-
age mirrored the steady, no-correction down-
trend expressed by both the linear and non-linear
trendlines derived for the seasonally adjusted
data for this category.
84
IV. C. 2- Food and beverages IV. C. 3- Cosmetics

Similarly, the steady ascent of the sales indicator The moving average metrics narrowed down
for the food and beverages category was just as the broad and patternless fluctuations of the
clearly reflected in the moving average metrics as sales indicator data for cosmetics and reflected
it was in the linear and non-linear expressions of the nearly-flat trendline expressed by the linear
the indicator data. trend.
85
IV. C. 4- Household goods IV. C. 5- Luxury items
The moving average curve traced a similar pat- Due to the marked seasonality reflected in the
tern as that of the locally weighted fit derived retail sales indicator the luxury goods, the mov-
from seasonally adjusted data for that indicator. ing average approach hardly matched the locally
weighted fit’s presentation of the trend’s change
of directions.
86
IV. C. 6- Sports and hobbies goods IV. C. 7– Hospitality services

The sharp seasonal peaks have rendered less The moving average curve derived from the
expressive the moving average curve for the basic retail sales indicator data for hospitali-
sports and hobbies goods sales indicator data ty services replicates the curve traced by the
as compared with the locally weighted fit, which non-linear trend for the seasonally adjusted
captured more clearly both direction and inflec- indicator data.
tion points.
87
IV. C. 8– Tourism services IV. C. 9– Medical services
The moving average for the tourism services The moving average approach applied to the
sales indicator clearly showed the reversal from sales indicators for medical services illustrates the
a two-year uptrend to a two-year downtrend, same general configuration as that revealed by
and thus closely replicated the non-linear trend the non-linear trend. The short-lived dip in the
curve. second quarter of 2016 is expressed in the mov-
ing average but not in the trendline.
88
Concluding
Notes
The business sector’s wanting capacity and
advocacy approach
89
Judging by the minimal 0.75 percent decline in lation of a reasoned economic policy and the
the overall retail sales indicator and the evolu- abolition of kleptocratic power structures within
tion of retail category indicators throughout the the State and the public administration.
year, 2016 witnessed a middling performance
of the retail industry. It was neither the best of Brighter expectations, however, will prove to be
years – as the trend for more sectors remained fickle if core economic ills are not addressed. By
negative and the December effect lacked much the end of four years of recession, retail activity
of its yesteryear luster – nor was its the worst of is still depressed by a high and rising rate of
years – as the second half of it saw eight of the unemployment and the job insecurity it engen-
nine retail sales indicators move up on account ders, stagnant to diminishing household dis-
of a better than average July performance. In posable incomes, the pressure of high interest
that sense, 2016 may be viewed as a pivot year rates on household debt, the pressure of high
where forces balance ahead of a firmer direc- taxation on household budgets, the ever-loom-
tional move. ing threat of further burdening households with
even higher tax rates, and an upward move of
When negative and positives influences balance, the consumer price index after two years of
a nudge could tip the scales in one direction or decline. The common thread to these six predic-
the other. aments is that they create a sense of financial
precariousness that is so detrimental to house-
Pushing towards the positive side, consumer hold spending.
expectations have certainly improved with the
apparent return to normality on the political
scene, which ignited prospects for the formu-
90
The business sector’s wanting ca-

pacity and advocacy approach
Addressing the six key depressants of consump-
tion expenditure requires an effective busi-
ness-oriented input to economic policy design,
which in turn entails the ability to formulate a
macroeconomic vision of a pro-growth policy
with distributional effects; a tall order indeed, giv-
en the dearth of competencies and institutional
capacity.
The Retail Activity Indicators project is the Retail

Observatory’s bid to build a knowledge base
dedicated to supporting retail enterprises. And
while that project constitutes a prerequisite to
research work centering on retail, its scope and
purpose can hardly be stretched to include the
much-needed macroeconomic vision and the
economic impact analyses.
91
92
Views from
Within
In Nine Answers
Supporting retail activity calls for internal
trade reform
93
The level of the retail activity is still below expec-
tations and admittedly falls short of the aspira-
tions of investors and operators in the sector.
This has resulted in a marked slowdown in actual
realized investments in 2015-2016. We hope that
projects that were deferred or rescheduled will
be executed in 2017.
2. Economic recovery
The economy has definitely embarked on a
Economist Dr. Nabil Fahed of Fahed Group
recovery path, underpinned by political and
Holding, importers of a broad range of
security achievements. A sustained recov-
retail products and operators of SuperValue ery, however, is conditional upon instigating
retail outlets, sheds insightful light on the far-reaching political reforms; fighting corrup-
economy and the retail industry. tion lies at the core of such reforms. Addition-
ally, large infrastructural projects need to be
1. The retail industry, past and prospects implemented and public services need to be
The retail industry witnessed an upswing in 2016. improved in the power, telecommunications
It is our expectation that 2015 set a trough in retail and transport sectors.
activity and that this positive turn will continue
into 2017. This is because consumers are now feel- 3. Needed laws and regulations
ing more secure and will therefore tend to hoard Recovery would also be placed on a firm foot-
less than they had in the past couple of years. ing with the enactment of the private public
94
partnership law and its associated regulatory merce as well as include new clauses to facilitate
provisions as well as the ratification of a State mergers, acquisitions and bankruptcies.
budget law that does not add new taxes to
the tax burden on the private economy and 6. Consumer credit
that includes incentive programs for new In absolute terms, the cost of consumer credit is
investments and expansion outlays in private in line with that prevailing in developed coun-
businesses. tries. In my opinion, what has slowed the expan-
sion of consumer credit is the Central Bank of
4. The supermarket sector Lebanon’s safeguard directive limiting access to
The supermarket sector has been quite vibrant consumer finance by setting a ceiling to individu-
and active and I see continuous investment in al household retail borrowing.
that activity, as sector-specific risk levels are not
excessive. As a matter of fact, the sector’s risk 7. Purchasing power
factor is highly correlated with overall economic Purchasing power in Lebanon is weak and the
conditions. I expect few new entrants into the propensity to spend is high. This is coupled with
sector with further consolidation of existing a strong need to live at a higher standard of living
players, albeit at a relatively slow, non-aggressive than is warranted by the overall low level of in-
pace. come as evidenced by the low median income.
5. For a new internal trade law 8. The retail industry and technology
There is a definite need to enact a new inter- The retail industry in Lebanon is at the forefront
nal trade law, which should take technological of technology in all its facets, whether it is in
advances into consideration, especially in e-com- supply chain, payments, management tools, and
95
the like. However, prevailing laws are slowing the
expansion of e-commerce and automation. In
particular, the delay in implementing the law on
electronic signature and the high cost and low
speed of Internet connection services are holding
back the retail industry’s investments and adop-
tion of new advanced technology.
9. Food waste
There is very little food waste at the level of stores
and supermarkets, as these retail enterprises are
driven primarily by the need to reduce costs and
maximize profits. Still, several initiatives have
been adopted to dispense products to food
banks and to recycle food.
96
Supporting retail activity calls for hence losses to claimants.

internal trade reform These shortcomings affect the two major aspects
of domestic trade namely, the business-to-busi-
A concept note
ness and the business-to-consumer aspects.
I. The need to reform internal

trade in Lebanon II. Current conditions and their
bearing on market structure and
Internal trade in Lebanon is currently regulated
efficiency
by the Code of Commerce, an antiquated body
of laws that failed to keep up with the modern- 1- Due to judicial laxity, commercial drafts,
ization pressures building up in an activity that which should act as prime debt instruments
accounts for a hefty portion of the country’s in a well-regulated trading environment, can
Gross Domestic Product. This has caused the no longer fulfill that function in the context of
emergence of inefficiencies that are exacerbated Lebanon’s domestic trade. Consequently, three
by traders having to: systemic weaknesses are currently hindering the
growth of trade credit:
- accept and/or deal with unsound pay-
a- Conditions for securing supplier credit
ments and debt instruments,
in that sector of activity are far from
- consent to, and/or adopt inconsistent
being standardized, as they are dic-
supply/purchase credit practices,
tated by the financial and/or market
- assume unwarranted risks, positions of the wholesale-retailer, sup-
- suffer lengthy judicial proceedings that plier-distributor tandems.
often end in mitigated rulings, and
97
b- Creditor enterprises are, more often system and the prevailing practices favor enter-
then not, deprived from resorting to the prises with substantial financial means, hence
banking system when cash-strapped, as hampering competitiveness and leading to the
they hold no ‘discountable’ commercial formation of oligopolies in almost of sub-sector
paper. This forces them to either curtail of domestic trade. As a matter of fact, the absence
activity or opt for high-interest ordinary of an enforceable statutory regimen for non-bank
bank credit, hence the emergence of credit extension and repayment, inevitably estab-
costly inefficiencies. lishes a system where facilities favor those enter-
prises that are dominant in their sector of activity.
c- Higher cost of consumer credit as an
inordinately large and fast growing 3- Unlike banks, providers of trade credit have to
portion of sales credit is done through bear inordinately high credit risks on their trans-
banks, mainly because trading enter- actions with other businesses as well as on their
prises are neither able nor willing to consumer sales because they have no access to
bear the risk attached to such sales. information on the credit worthiness and stand-
ing of their clients.
d- With suppliers of non-bank trade credit
increasingly shunning commercial drafts All alternative remedies to this situation should
as acceptable debt instruments, the use involve the securing trade creditors’ access to
post-dated checks gained ground. information relevant to corporate as well as
individual debtors. Such information could be
2- In the absence of laws and regulations govern- managed within a structure akin to the central
ing commercial non-bank credit, both the existing bank’s “Centrale des risques” which would be
98
subjected to the supervision of the Ministry of giving rise to costly inefficiencies in internal trade.
Economy and Trade or the Ministry of Finance.
Alternatively, credit information could be en- The sources and causes of these inefficiencies
trusted to a company or a group of companies should constitute the focal issues in this research
that would structure and supply this information study:
under rigorous official supervision. risks attached to business-to-business and
business-to-consumer credit due to the quasi-ab-
sence of credit information,
III. Aim and approach
- risk-based pricing and its impact on com-
The reform’s aim is to modernize the Code of
petition and consumer prices,
Commerce with a view to introducing statutory
- the absence of a ‘bankable’ trade debt
credit sales procedures and debt instruments,
instrument,
and defining special judicial recourse for the
collection of trade debts. - unregulated and inconsistent trade credit
practices,
This requires action in four areas namely, diag- - articles in the Code of Commerce that
nostic, legal, technical, and administrative. need to be revised as a precondition for
the modernization of the trade sector.
1- Analysis and diagnosis - identify inherently risky and/or distortive
An investigative and analytical research study trade and credit practices that need to
needs to be conducted in collaboration with all obviated by the modernization of the
stakeholders. The research study should be de- trade sector’s legal, regulatory and finan-
signed to reveal the constraints that are currently cial framework.
99
2- Legislation 3- Technical aspects
a- the drafting of all new articles and amend- These involve the creation of a comprehensive
ments to existing articles that should constitute trade credit information system. Options that ought
the more current Code of Commerce in collabo- to be thoroughly examined and considered include:
ration with all stakeholders. - establishing a joint public-private association
with a mandate to develop and manage a cen-
b- the drafting of new laws to regulate and tral trade credit information database,
encourage the establishment of financial compa- or
nies that facilitate trade credit, such as factoring - encouraging private enterprises to provide
companies, trade credit insurance companies and professional trade credit information services,
the like. preferably by entering into partnerships with
renown international companies in that field.
c- the drafting of amendments to company laws
with a view to requiring companies to publish 4- Administrative setup
complete financial statements on a quarterly ba- This calls for proposing alternative designs for
sis, and this in order to facilitate the assessment an official or a mixed public-private commission
of a companies credit standing and creditwor- that would assume supervisory and regulatory
thiness. authority over all aspects of internal trade. Such
commission could be presided by a minister and
d- action and reform needed within the judicia- should include representatives of various stake-
ry to speed up the proceedings of commercial holders in the public and private sectors.
tribunals.
100
Opinion
ELUSIVE PROSPERITY, RECEDING PROSPECTS
Musings on globalism and the economy’s
defunct paradigm
Capitalism, past and present

Democracy and social policy
Globalism: Ideology or historical process
The national sovereignty backlash: the
emergence of post-globalist capitalism
A template for reforms
101
ELUSIVE PROSPERITY, RECEDING PROSPECTS private ownership of personal and business as-
sets, and the freedom to use these assets without
Musings on globalism and the economy’s legal or regulatory hindrance; b) State interven-
defunct paradigm Albert Nasr tion is condoned only to prop up the market
economy (and its stalwarts); and c) trade open-
The plethora of literature on current international ness and the unrestricted movement of capital
economic and financial affairs directs thoughts to are essential to generate affluence (directly at the
five basic conceptual constructs namely, capi- crest, and through ‘trickle down’ for the rest).
talism; democracy; welfare; globalism; and the
nation-state. Notionally, economic policy in such a system
should have been conducive to capital accumu-
When the five terms-cum-constructs are connect- lation in all sectors of activity; after all, that’s what
ed, a pattern emerges that is laden with clues capitalism is about, and that’s whence it derives its
to understanding complex international devel- name. In reality, however, that was not the case.
opments and, tangentially, Lebanon’s economic
history and current economic quandary. The halcyon days
Lebanon’s brand of capitalism was best exempli-
1. Capitalism, past and present fied by the emergence in the nineteen-fifties of
Beirut as a trading, banking and financial center
The precepts for the Levant and beyond. This came about
For the best part of seven decades, Lebanon’s primarily as a result of colonial investments in the
strain of capitalism was extolled roughly in the city, but also in the wake of the de-industrializa-
following terms: a) it is a system that sanctifies tion of Mount Lebanon, followed by the ruinous
102
impact of the First World War on that once-pros- come ‘annex’ as a lodging place for wealthy tour-
perous region. ists. As for the country’s peripheral regions and
the city-state’s poverty belt, they were deemed to
Trade openness, free movement of capital, and a be an imposed encumbrance, not worth spend-
stable currency were key to the city’s – or more ing much of the recurring State budget surpluses
appropriately, the city-state’s – role as a regional on their development.
provider of all forms of services.
In the eyes of its beholders, the city-state, with its
In such a system, capital naturally flowed to seg- oversized port, its commercial links with the region,
ments of activity that required less of it, attracted its competencies in the provision of services to that
by comparatively high gains and rapid accumula- region, could have remained über alles had it been
tion of wealth. In that era, success in the race for on its own, insulated, protected, cocooned, and not
riches entailed weaving solid commercial and fi- “a piece of the continent, a part of the main.”
nancial interests with the countries of the region.
The halcyon decades ended with the internal war.
The three decades to the mid nineteen-seventies
were deemed to have validated this paradigm. 2.Democracy and social policy
Equally lauded was the country’s parliamentary
The city-state built itself a modern cosmopolitan
democracy, but that was – and still is – also a
façade, an alluring display window so necessary
peculiar variety of governance.
for the conduct of regional business; a Potemkin-
esque deception if there was one.
Whereas the elected legislators in Western democ-
Beyond the façade, Mount Lebanon was a wel-
103
This systemic failure to accept the redistributive rationale of fiscal policy has
fossilized a raw form of capitalism, one that had ceased to exist in advanced
industrialized countries.
racies had to adopt social policies with an egali- governance that not only did not depart from
tarian tinge at the behest of their voters and faced capitalism, but it plainly reinforced it morally and
the threat of not being re-elected should they fail ideologically.
to legislate in that direction, Lebanon’s parliamen-
tarians were not under such obligation, as repeat Then came globalism.
votes were theirs by ‘tribal’ and confessional right.
3. Globalism: Ideology or histori-
Whatever socially motivated measures or proj- cal process
ects were undertaken throughout the decades
There are two misleading notions propagated by
of prosperity, reflected the will, moral standing,
the globalist literature: The first is the use of the
or statesmanship of those who instigated them.
term ‘globalization’ in instances where the term
The system’s bouncers made sure daring socially
‘globalism’ – or more appropriately ‘global statism’
motivated initiatives were stifled in the crib, and
– ought to be used (no minor semantic matter),
such measures and projects were scant indeed.
and the second is the charge that opponents of
globalism are against the fusion of activities and
This systemic failure to accept the redistributive
aspirations that make the oneness of humanity.
rationale of fiscal policy has fossilized a raw form
of capitalism, one that had ceased to exist in
On the latter point, no words ring more forebod-
advanced industrialized countries.
ingly pertinent than those of J.M. Keynes, uttered
more than eighty years ago: “Ideas, knowledge,
To different degrees, these countries had gone
art, hospitality, travel – these are the things which
farther away from the primitive and callous
should of their nature be international. But let
system toward the welfare state, a form of
104
“Ideas, knowledge, art,

hospitality, travel – these are
the things which should of their
goods be home-spun whenever it is reasonably nature be international. But let
and conveniently possible, and above all, let
goods be home-spun whenever
finance be national.”
it is reasonably and conveniently
Globalism is primarily an ideology; globalization possible, and above all, let
is a process. As a process, globalization is neither a finance be national.”
historical imperative nor is it necessarily a vector of
propped up as it was by international financial
progress, and its opponents are certainly not retro-
institutions. With the consequent evanescence of
grade nationalists who embrace völkisch ideas.
national financial boundaries and jurisdictions,
the reins of global-level financial manipulation
As an ideology, globalism triggered, guided, and
were placed in few hands intent on pushing for
expanded the damaging variety of globalization,
more control and more concentration of wealth.
namely financial globalization.
In this process, some of the very foundations of
Western democracy were gradually nibbled away
Heralded by financial deregulation in the United
to varying degrees in different countries.
States, which started in the late nineteen-sev-
enties with a string of legislations that unbound
Long accumulated ‘social gains’ are anathema to
greed and the yen to dominate, the globalist
globalist ideology. Thus, the first foundation of
ideology gained ground and countries, shrewdly
democracy that had to go was accountability to
the electorate, to be replaced by accountability
As an ideology, globalism to global financial institutions and transnational
triggered, guided, and conglomerates.
expanded the damaging
variety of globalization, namely
financial globalization.
105
.. the first foundation of democracy
that had to go was accountability
to the electorate, to be replaced by tional – aspirations to regain a regional role in
accountability to global financial commerce and finance, conspired to fashion the
institutions and transnational self-image of modern-day Phoenicians traders
conglomerates. and middlemen as old-hand globalists. And of
course, a display window had to be rebuilt and
was placed under private stewardship with a
Lebanon had an edge on that count. After a
mandate to price the plebs out of its bounds.
decade and a half of basking in the carnage of an
internal war, the economy of the early 1990s had
Facetiously, impish analysts of those days harped
to re-integrate within a radically different world
on about the enlightened foresight that led to
than the one it had left when it took time off to
the embracement of globalism well before the
attend to warfare.
term gained currency. The sneer was not viewed
as such, and it echoed – seriously, amusingly.
Reintegration, it was commonly thought, could
occur painlessly since the economy was as un-
The irony took on a tragic turn with the increas-
encumbered as ever by social obligations to its
ing pauperization of the labor force, as measured
workforce. And its parliamentarians were also as
by the steadily diminishing share of wages in
free as they have always been from the burden of
Gross Domestic Product. So much for prosperity
being held accountable for the socially-minded
trickling down.
legislation they had so deviously failed to enact.
Trade openness and the discretionary control

On the economic front, the credo of laissez faire,
over business capital induced the displacement
trade openness, and the rekindled – but irra-
of a number of manufacturing concerns to ‘wage
106
At the public sector level,

fiscal policy was summoned to
provide the tools for the further
havens’ in the region, thus conferring a peculiar compression of the share of wages
meaning to corporate social responsibility. in national income. Regressive
At the public sector level, fiscal policy was taxation and unbridled public
summoned to provide the tools for the further
borrowing were the most injurious
compression of the share of wages in national
of these tools.
income. Regressive taxation and unbridled public
borrowing were the most injurious of these tools.
Capitalism is what policies make of it. As a guiding
model for economic management, capitalism may
Adding insult to injustice, this nefarious redistribu-
be viewed as being ideologically insipid, but the
tion of income and wealth was incessantly cou-
shortsighted and unenlightened economic poli-
pled with the mendacious claim that in the phase
cies of Lebanon’s ruling posse have rendered the
of reconstruction, the economy could not afford
country’s strain of capitalism plainly unpalatable.
the cost of instituting a modicum of social justice.
Through thick and thin, the plutocracy has evoked 4. The national sovereignty back-
State indigence as a lame justification for unwill- lash: the emergence of post-glo-
ingness to introduce policies that provide basic balist capitalism
social protection and equal opportunity for all. Financial deregulation, the overpowering sway of
mega supranational financial corporations, and
the emergence of corporatocracies in a number
Trampling on national of Western countries have led to the financial
sovereignty on the altar of implosion of 2008 and are paving the way for an
dysfunctional federations
invariably revives nationalism,
either in its virulent variety or in
its more judicious version.
107
even more destructive collapse, topped off with a Compared with this level of threat, the backlash
cataclysmic currency pole-shift this time around. is reasoned indeed; it calls for the law of the land
Writ large is the fact that globalism did not sur- to be homegrown and holds that certain national
vive its first major economic crisis. interests ought to supersede compliance with
the interests of global financiers.
Trampling on national sovereignty on the altar of
dysfunctional federations invariably revives na- The historical process has been engaged and
tionalism, either in its virulent variety or in its more the globalist interlude in the history of capital-
judicious version. And because what is past is pro- ism is on a waning course. This is so because the
logue, the reaction should have been predictable. misshapen, global-statist form of capitalism has
lost its ability to kindle hope for more material
The backlash is history in the making; it is generat- progress and by the same stroke, its institutions
ing strong centrifugal forces that are beginning to have lost the confidence of those who are under
splinter supra-national behemoths and treaties. its yoke. Growing awareness of the deceitful and
disruptive social, political, and security ‘engi-
Of these, the triple T treaties express nothing less neering’ wrought by globalism will help lay the
than the consummation of war alignments and moral foundations of the emerging version of
attempts to consecrate the power of transnation- capitalism.
al conglomerates over signatory governments.
Ironically, these treaties were partly designed The backlash is history in
to parallel the World Trade Organization, which the making; it is generating
globalists view as having tolerated a ‘disruptive’
strong centrifugal forces that
say and sway to ‘maverick’ countries.
are beginning to splinter
supra-national behemoths
and treaties.
108
the past quarter century has

proven that it is impossible for
Lebanon’s economy to replicate
past prosperity just by clinging
Viewed from that perspective, factors such as elec-
to the trade openness ideal,
tion outcomes in first-world countries are of sec-
ond-order importance. These outcomes may hasten
notwithstanding the notional
or slow down the process of change, but that pro-
advantages of free trade.
cess is a manifestation of deeper undercurrents and
hence there is hardly a conceivable stratagem that The primary premise is that the past quarter cen-
could marshal critical force to induce a reversal. tury has proven that it is impossible for Lebanon’s
economy to replicate past prosperity just by cling-
ing to the trade openness ideal, notwithstanding
5. A template for reforms
the notional advantages of free trade.
Saddled by a massive and unpayable public debt,
fast-degrading governance, and complex geo-po- For one, traders have lost considerable ground in
litical risks, Lebanon’s polity is in no position – eth- regional triangular trade, and have been marginal-
ically and practically – to retort the well-merited ized by the emergence of larger regional capital and
castigation of globalist financial institutions. markets. And, of course, the warehousing, transit,
and rotating-platform functions – relic buzzwords
While admitting that the system can hardly be from the nineteen-seventies – have been bypassed
tweaked out of its predicament by patchy re- and outclassed by fast regional infrastructure de-
forms, a guiding template may be drawn that velopment. As for the web of commercial interests
is meant to focus research on the fundamental weaved with the region, it proved to be too fickle to
flaws of the obsolete paradigm. withstand the emergence of markedly better-capi-
talized regional trading houses.
109
.. economic reform needs to be
structural and focused mainly on
capital accumulation in the goods grounds of a secular equilibrium in State finances
producing sectors – manufacturing be confirmed and espoused.
industries and agriculture
A social policy needs to be formulated that ought
to be anchored to the principle of instituting equal
opportunities for all. With Lebanon’s Gini index
Hence, economic reform needs to be structural
nestled so high on the global scale, analysts may
and focused mainly on capital accumulation in
want to revisit the chapter on the redistributive
the goods producing sectors – manufacturing
powers of fiscal policy. By the same stroke, they
industries and agriculture – in order to narrow
may also have to ponder over the role of these
down sectoral disparities, however moderately.
powers in heightening work incentives, establish-
ing a national work ethos, and spurring growth.
Arguably, a larger measure of sectoral balance
would result in a more sustained and stable
Reform also calls for dismantling kleptocratic
growth as the economy’s over-dependence on
institutions, eradicating corruption, penalizing
some of its sectors and some of its regional eco-
the wasteful and improvident management of
nomic ‘partners’ would be evened out.
communal assets, and thwarting rent-seeking
Economic efficiency and equity, the normative
and other predatory economic activities.
principles of public finance, need to be estab-
lished as policy guides. And it is only when this
Barring lightning, deep and all-out reforms, Leba-
is achieved, would the functions of allocation,
non’s governance and the tribulations it wrought
distribution, and stabilization be effectively
will make amusing cartoon depictions in treatises
fulfilled, and the merits and the solid theoretical
on desolation economics.
110
APPENDIX
Categories and sub-categories of retail
goods and services for which sales indica-
tors were built
The report analyzed retail sales data relating to

six categories of consumer goods that include a
total of 37 sub-categories and three categories of
services grouping 15 sub-categories. Following
are the categories and sub-categories of retail
goods and services covered by the report.
111
Appendix - table 1 Appendix - table 2
categories of goods 6 sub-categories 37 categories of services 3 sub-categories 15
Clothing and fashion )sub-categories 8( Hospitality )sub-categories 4(
Men’s wear Catering
Women’s wear Restaurants
Women’s accessories Pubs / nightclubs
Children’s wear Hotels / resorts
Family clothing
Shoes Tourism & entertainment )categories 6(
Apparel Travel agencies
Fabric / sewing Travel services
Cosmetics )sub-categories 3( Movies / theaters
Perfumes Dance schools / studios
Cosmetics Tourist attractions / exhibits
Personal care Clubs
Household goods )sub-categories 11( Medical services )sub-categories 5(
Sanitary / utilities Doctors
Glass / paint / wallpaper Dentists
Hardware Ophthalmologists
Furniture Hospitals
Floor covering Other medical / health services
Drapery / upholstery
Miscellaneous home furnishing
Household appliances
Audio-visual
Antiques restoration
Crystal & glassware
Luxury items )sub-categories 7(
Jewelry / watches / silverware
Crafts
Art dealers galleries
Florists
Cigars
Gifts
Electronics
Sports and hobbies )sub-categories 3(
Sporting goods
Games / toys
Music instruments
Food & beverages )sub-categories 5(
Supermarkets
Confectionery
Bakeries
Miscellaneous food stores
Liquor / beer / wine
112
Monthly retail sales indicators for consumer goods
Fashion & clothing Food & beverages Cosmetics Household goods Luxury goods Sports & hobbies items
Jan-16 62.77 84.40 73.29 59.92 50.08 58.24

Feb-16 57.04 83.02 89.02 53.48 53.80 64.75
Mar-16 63.04 93.45 68.92 54.65 53.59 53.93
Apr-16 60.51 86.56 124.71 55.79 48.98 52.96
May-16 66.64 89.78 124.78 62.09 57.29 50.25
Jun-16 68.18 88.13 114.82 66.40 55.51 51.19
Jul-16 83.59 94.43 141.13 68.58 60.01 60.93
Aug-16 76.39 96.94 112.87 71.15 64.15 55.83
Sep-16 58.61 93.29 145.51 60.49 54.89 53.22
Oct-16 57.43 91.72 99.71 57.81 51.47 57.61
Nov-16 59.26 88.62 95.41 65.12 55.61 56.32
Dec-16 96.34 146.25 133.61 104.82 113.67 151.43
Quarterly retail sales indicators for consumer goods
Q1-2016 Q2-2016 Q3-2016 Q4-2016

Fashion & clothing 60.95 65.11 72.86 71.01
Food & beverages 86.95 88.16 94.89 108.86
Cosmetics 77.08 121.44 133.17 109.58
Household goods 56.02 61.43 66.74 75.92
Luxury goods 52.49 53.93 59.68 73.58
Sports & hobbies items 58.97 51.47 56.66 88.45
113
Half-yearly retail sales indicators for consumer goods
H2-2016 H1-2016 H2-2015 H1-2015 H2-2014 H1-2014
Fashion & clothing 71.94 63.03 69.43 68.15 77.43 74.66
Food & beverages 101.88 87.56 82.97 75.14 79.22 63.24
Cosmetics 121.37 99.26 116.99 98.05 106.24 93.42
Household goods 71.33 58.72 70.17 57.46 73.08 67.28
Luxury goods 66.63 53.21 58.02 58.65 66.76 56.42
Sports & hobbies items 72.56 55.22 55.77 52.62 63.37 46.10
Yearly retail sales indicators for consumer goods
2013 2014 2015 2016
Fashion & clothing 80.74 76.04 71.50 67.48
Food & beverages 67.33 71.23 83.09 94.72
Cosmetics 95.46 99.83 112.43 110.32
Household goods 72.16 70.18 66.01 65.02
Luxury goods 58.46 61.59 63.82 59.92
Sports & hobbies items 51.97 54.73 61.36 63.89
114
Covers 30 months
Previous
till June 2015
Published on
August 10, 2015
editions of
90 pages
the Retail Covers 36 months
Activity
till December 2015
Published on
February 15, 2016
Indicators
109 pages
report Covers 42 months

till June 2016
Published on
August 10, 2016
106 pages
115
www.LFAlebanon.com
116

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retail activity indicators | second half of 2016

RETAIL ACTIVITY INDICATORS

A semi-annual report prepared by

LFA Implementing Partner

Published by the Retail Observatory at the Lebanese Franchise Association

RETAIL ACTIVITY INDICATORS

The Lebanese Franchise Association (LFA) and QuantAnalysts

Special thanks go to Ms. Nour Nasr for putting her expertise in

17. Trend analysis plainly showed a The report’s rationale

This is certainly a laudable precedent-setting

At the policy-making level, sounder macroeco-

In the meantime, coffee cup readings predicting

In public finance, the choice

Data sources they capture digital retail transactions.

Policy-makers simply cannot

However, a comprehensive analysis of the boosting impact on household spending as

While a thorough supply-side analysis of these

In 2016 as a whole, the CPI rose by 3.14 percent.

2. Tourism recorded in the year before, 24.63 percent more

percent in 2016 compared with a rise of 12.05

Of total tourist arrivals over the past four years,

Tourist-generated demand being one of the de-

In 2016, the value of imports totaled $18.7 billion,

On a month-to-month basis, the overall indicator

On a year-to-date basis, the overall sales indicator

The pattern outlined by the overall indicator was

The overall retail sales indicator followed the

The clothing and fashion category includes the

III.A.2– Food and beverages

III.A.4– Household goods

The year-to-date comparisons again deviate from

Items grouped under the household goods category

The sales indicator for luxury goods restrainedly

Seven sub-categories are included in the luxury

III.A.6– Sports and hobbies goods

On a year-to-date basis, the indicator remained

The sports and hobbies category represents three

On a year-to-date basis, the July 2016 surge

III.A.8- Tourism services

On a year-to-date basis, the sales indicator for

The year-to-date comparison has that indicator

year. The subsequent three months saw the

The medical services category includes five sub-cat-

A quarter-to-quarter comparison shows a min-

A year-to-date quarterly comparison, howev-

A year-to-date comparison saw the fourth-quar-

III.B.2– Food and beverages

III.B.4– Household goods

The sales indicator for luxury goods moved up by

The sales indicator for hospitality services surged

That indicator also showed advances when its

In a quarter-to-quarter comparison, the sales indi- III.B.9- Medical services

The sales indicator for this category of retail

cent on its Q4-2015 level. In Q3-2016 the indicator

III.C- Half-yearly evolution of retail

The sales indicator for food and beverages for

III.C.4– Household goods

The sports and hobbies sales indicator recorded

The sales indicator for that retail category was

III.C.7- Hospitality services III.C.8- Tourism services

On a year-to-date count, the sales indicator for

III.C.9- Medical services

The overall retail sales indicator for 2016 re-

Of the nine categories of consumer goods and