Shopping centers and department stores in Mexico City are now closed to help limit the spread of Covid-19.
Mayor Claudia Sheinbaum announced their closure at a press conference on Tuesday but stressed that essential businesses including supermarkets, other food stores, pharmacies, gas stations and banks will remain open. Restaurants are limited to providing take-out to customers.
Sheinbaum said that officials from four different government agencies will carry out patrols to ensure that businesses are complying with the order to close.
The mayor also said that large public parks in the capital, including the Chapultepec, Tláhuac and Aragón forests, have been ordered to close effective Wednesday.
Although their closure in the capital is obligatory, the department store chains Liverpool, Sears and El Palacio de Hierro announced that they were closing all their stores across the country for a month due to the coronavirus pandemic and the government’s declaration of a health emergency.
Between 80,000 and 100,000 employees will stop work as a result of the stores’ decision to close, the newspaper El Economista reported. All three department stores said that their online stores will remain open.
Still, analysts who spoke with El Economista said that they expected it would be another year before the retailers reach the level of sales they saw before the arrival of Covid-19 to Mexico.
Along with businesses such as restaurants and gyms, retailers will be among the hardest hit by the coronavirus pandemic in the short term, said Jose Antonio Cebeira of financial services company Actinver.
However, he said that large department store chains have the wherewithal to withstand the tough times ahead.
Liverpool, which also owns and operates Suburbia department stores as well as a number of smaller chains that are also closing temporarily, said that its “commitment” is to guarantee the positions of all of its employees and to continue to pay their salaries and benefits “to the extent that is possible.”
Sears México owner Carlos Slim has also provided a guarantee that he won’t dismiss any of his employees at his several companies. However, El Palacio de Hierro has not publicly announced whether its employees will continue to be paid in full while off work.
The government said on Monday that non-essential businesses that have been ordered to close for the next month must not dismiss their employees and must continue to pay them their full salaries. Those that don’t comply with the directive will face administrative sanctions or even criminal penalties, Foreign Affairs Minister Marcelo Ebrard said.
Although the government has ordered businesses to keep employees on their books, thousands of people are still at risk of losing their jobs, said José Manuel López Campos, president of the Confederation of Chambers of Commerce, Services and Tourism (Concanaco).
He said that 65% of businesses across the country are currently closed and that some of them won’t survive the enforced closure. López Campos also said that most tourism-oriented businesses including hotels are closed or have virtually no customers.
Concanaco estimates that the retail, services and tourism sectors lost revenue of just over 243.5 billion pesos (US $10 billion) between March 17 and 31 and with the Easter vacation period fast approaching, and stricter virus containment measures in place, the losses will only escalate.
Many small businesses will not be able to afford to continue paying their workers during the month-long health emergency period, “as the federal government is asking,” because they won’t be generating any income, Concanaco said in a statement.
The business group urged the government to provide an economic stimulus package for businesses and to allow them to defer the payment of taxes.
“If they have to comply with their annual [tax] declarations, many small and very small businesses would have to choose between sacrificing their staff in order to be able to pay their taxes or breaching their tax” obligations, Concanaco said.