The Chairman of the Parliamentary Budget Office (PBO), Giuseppe Pisauro, spoke today at an informal hearing before the Chamber of Deputies’ Economic Activities Committee as part of the examination of bills concerning the rules governing the opening hours of retail establishments.
Since the end of the 1990s, Pisauro noted, various legislative measures have reorganised the rules governing retailing with the aim of modernising and liberalising the sector. Most recently, in 2011, the so-called “Save Italy” decree included provisions for the total deregulation throughout the country of the opening hours of shops, Sundays and public holidays included. The bills being examined by the Committee have an impact on this aspect, reintroducing limits on Sunday and holiday opening and delegating their regulation to local authorities, apart from exemptions ‑ in some of the bills ‑ for small shops in tourist areas, seaside resorts and small mountain locales, and for some categories of goods.
The issue of the Sunday opening of shops is highly controversial and widely debated in Italy and internationally, bringing religious, social and union issues into the discussion of the needs of consumers, workers, competition and the investment decisions of businesses.
The bills are being introduced in a context in which sixteen of the twenty-eight EU countries do not impose substantial restrictions on Sunday opening. The liberalisation of opening hours has produced a variety of effects: it has modified consumption habits, making it possible to spread purchases out over the entire week; contributed to employment growth, but also to the segmentation of the labour market; amplified the consequences of the economic crisis for certain small retail businesses; and, together with other trade liberalisation rules, contributed to the formation of the current organisation of large-scale retail trade, reducing the fragmentation of the sector. The concomitance of different factors makes it impossible to isolate the effect of Sunday opening on the main economic aggregates, but does force us to consider multiple aspects, striking an appropriate balance between consumer needs, safeguards for those working on holidays, the freedom of competition and businesses’ freedom of choice.
The challenge, given the current state of information, of assessing aspects, both microeconomic (households, workers and enterprises) and macroeconomic (consumption, turnover, prices), as well as the interaction with other economic factors (the other trade modernisation and liberalisation laws, the economic crisis, changes in labour market regulations, the development of online commerce, etc.), suggest focusing on the structural characteristics of the retail sector and their evolution, on issues connected with the protection and regulation of Sunday work and on consumption behaviour on public holidays, setting aside issues that cannot addressed with data, such as individual freedom, time away from the family, the use of leisure time or the possible impact on urban decline.
In 2016, there were more than 606 thousand retail businesses in Italy, about 100 thousand more than in France, 120 thousand more than in Spain and over 270 thousand more than in Germany. Between 2010 and 2016, their number decreased by 6 per cent, compared with an increase of 20 per cent in France, 2.5 per cent in Germany and 0.6 per cent in Spain.
Examining developments in retail turnover (excluding automobiles and motorcycles), between January 2006 and July 2018 retail sales contracted by about 2.7 per cent, reflecting the impact of the economic crisis. The overall reduction was the result of opposing trends in the two main merchandise categories, food and non-food. The former posted growth of 5.2 per cent growth, while the latter saw a decline of 6.8 per cent.
Within these aggregates, developments in the different retail sales channels differed and diverged. Figures from the National Trade Observatory of the Ministry of Economic Development show that the strongest growth involved large-scale retail trade: overall, between 2010 and 2017, the number of enterprises expanded by 16.3 per cent, driven primarily by the growth of department stores, whose number more than doubled (from 1,570 to 3,169). Growth was faster than the national average in the South and on the Islands and slower in the Centre. The number of employees also increased significantly, rising by almost 11 per cent (14.4 per cent for males and 8.6 per cent for females), mainly in department stores (45.2 per cent).
Retailing is making one of the largest contributions to preserving employment, and this is mainly due to the growth of employment with large retailers. While the pace of sales growth has been slow, the number of employees has recovered, rising from 1.050 million in the second quarter of 2008 to nearly 1.2 million in the corresponding quarter of 2018. In the third quarter of 2018, the number of payroll positions with small retailers (about 560 thousand) rose above the level posted in 2010.
Between 2008 and 2017 the phenomenon of Sunday work appears to have become pervasive, involving more age groups and even workers with a medium-high level of educational attainment. At the same time, the increase in recourse to female labour, part-time work and shift work reveals a certain tendency towards segmentation even within payroll employment, although open-ended contracts remain the primary form of contract (78.4 per cent of those who work on Sunday at least once a month). The share of employees used for Sunday work in retail trade has almost reached that for the self-employed working on Sunday in the same sector.
A considerable number of people shop on Sundays, although the volume of purchases is smaller than that recorded on other days of the week, partly reflecting the smaller number of shops open. Data from the Istat survey on the use of time show that in 2014 24.2 percent of persons over 15 made purchases on Sunday, compared with 51.9 per cent on Saturday and 43 per cent on working days. The average amount of time devoted to shopping is substantially similar to that on other working days, and just under that on Saturday.
Although the overall share of people making purchases decreased, between 2003 and 2014 Sunday was the only day of the week on which the proportion increased (1.9 percentage points). This occurred at the expense of other days, in particular Saturdays (-3.5 points). Moreover, partly in consideration of the effects of the economic crisis, the increase was concentrated above all in the first part of that period (1.5 percentage points between 2003 and 2009). The average time dedicated to shopping on Sunday increased by about 50 per cent (to 1 hour and 7 minutes) compared with broadly no change in time employed on other days (1 hour and 18 minutes on Saturday and 1 hour and 4 minutes on weekdays).
Any empirical quantification of the possible macroeconomic impact of the bills is highly uncertain, for several reasons: there are few past examples of similar legislative changes in Italy, so it is necessary to estimate impacts, taking account of the experiences of other countries. The historical precedents are largely cases of liberalisation, so it is necessary to assume that a restriction would produce symmetrical effects from those of liberalisation. The data underlying the estimates refer to a period in which Internet sales were small or non-existent, while today the scope for substituting in-store purchases with online shopping is likely to be considerable. With all these caveats, the PBO has produced an econometric estimate of the effects of the reforms of opening hours of retail establishments implemented in the last 20 years in the main advanced countries. In line with the available literature, the analysis confirms that on average in the OECD countries, past liberalisations of business hours have had a positive impact on employment, while the effect on sales and prices is not statistically significant. The effects on these macroeconomic variables, however, differ somewhat across the economies considered. This could reflect in part the different characteristics of the measures adopted at the individual country level. The reform carried out in Italy in 2011 expanded employment more than the average increase associated with reforms in other countries, such as France, Germany and Finland.