The aftermath of Corona, a rise in inflation and interest rates and the associated weak consumer demand make life difficult for the domestic retail sector. The Chamber of Commerce announced that the sectors had to surrender 3.8 percent in real terms in the first half of 2023 compared to the previous year. Only in the toy and clothing trade did companies achieve a real plus on average. In addition, the retail sector is currently being hit by a wave of bankruptcies.
Well-known dealers such as Kika/Leiner, Forstinger, Gerry Weber Austria, Reno or the Sport 2000 cooperative Zentrasport had to file for bankruptcy this year. Other dealers like Salamander or Delka are on the verge of collapse. The consequences of the stressed economy are high and rising insolvency rates, a significantly increasing number of closures and a declining number of trade and retail start-ups, trade chairman Rainer Trefelik admits.
Only two sectors achieved a plus
In nominal terms, retail sales increased by 4.4 percent in the first half of the year, but in real terms the sector failed to realize any economic growth for nine months in a row, according to calculations by the Austrian Economic Institute. In the first half of the year, only toy retailers, with a plus of 9.2 percent, and the clothing trade, with a plus of 2.9 percent, were able to achieve growth. All other sectors were partly in the red.
sales plummeted
The furniture trade in particular had to accept drastic downturns. The drop in turnover was more than a quarter. Electronics retailers, down 9.9 percent, booksellers, down 9.5 percent, and online retail, down 6.1 percent, also fell sharply in the first six months. The outlook for 2023 as a whole is bleak, with no real growth in revenue to be seen, the sellers said. Austria also fares poorly in an EU comparison: the real development of retail sales has been below the EU-27 average for the sixth consecutive six months.
This weak economy also has consequences for the labor market. The development of employment in the retail sector fell by 0.8 percent in the first half of the year. Only the toy and clothing trade has expanded its workforce. After a huge increase in recent years, the number of vacancies has also fallen again, although the trade still has more than 20,000 vacancies.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
