Dnipropetrovsk-based ATB-Market LLC, the owner of the Ukrainian-based ATB discounter grocery chain, estimates the losses of its outlets and distribution centers in war-hit Luhansk and Donetsk Oblasts at over Hr 1 billion.
The causes of the chain’s losses are the seizure of ATB stores by militants of the self-proclaimed Luhansk People’s Republic, the complete or partial destruction of commercial and logistics facilities, commodities and cash thefts, the theft of and damage to commercial equipment, and the hijacking of vehicles, the ATB Corporation said in a press release.
“The tragic events in the east of the country imply not only a humanitarian aspect – the war in Donbas has destructively affected the economy of our state. The current and projected losses will become an anchor weighing down the Ukrainian economy for many years,” ATB Corporation CEO Boris Markov said.
He said that the situation with businesses in the area of the armed conflict in the country’s east is almost hopeless.
“It is obvious that small- and medium-sized companies do not have the necessary margin of safety to survive the developments. As for big businesses, the enormous damage caused by working in Luhansk and Donetsk regions will at best stop development and at worst it translate into the bankruptcy of many companies,” Markov said.
As of Oct. 6, 2014, almost 70 percent of 226 ATB grocery stores, or 156, in 64 cities and towns in Donetsk and Luhansk Oblasts are closed. The remaining 70 retail outlets in the two regions continue work, of these, 22 outlets are located in the zone of the antiterrorist operation.
Thus, taking into account the previously estimated losses, ATB-Market analysts predict that the chain will be in the red in 2014.
What is more, the analysts estimate food security in the self-proclaimed Luhansk People’s Republic and Donetsk People’s Republic has fallen to a critically low level as of today.
“Retail operators are now unable to sell due to the absence of electricity and water, and a halt to delivery of products, impossibility to collect cash because of a direct threat to employee’s life and the damage of commercial property. If the situation with the lack of food doesn’t change radically in the coming months, famine will strike Donetsk and Luhansk in winter,” the analysts said.
