Busy shopping streets are currently a deceptive picture. Despite some good visitor numbers, Austrians are not very generous in the retail trade and the hoped-for recovery has not materialized. Nevertheless, the traditional wage rounds are coming up – employers are preparing for tough collective bargaining negotiations.
“The fact that increased consumption will get us out of the crisis is currently not the case as hoped,” regrets trade chairman Rainer Trefelik. At the moment, only costs are rising, but turnover remains the same. People prefer to spend their money in restaurants than in shops – Schnitzel beats a T-shirt, so to speak.
The hope that higher wages would translate into higher retail sales has not been fulfilled. Only a third of the increased income flows into trade, the rest is saved or spent elsewhere. Although many tourists and locals are out and about in the cities and shopping streets, in many cases their wallets are not so loose anymore.
In the first half of the year, turnover even fell by 0.8 percent compared to the previous year. Grocers and clothing retailers recorded a small increase. The car trade performed best on an annual basis with an increase of three percent, but there is still a lot of catching up to do in this area; delivery problems that previously bothered dealers and customers.
The furniture trade is in deepest crisis
The biggest problem child, however, is the furniture trade with a decline of 12.7 percent. Most employees there lost their jobs in the first half of the year as a result of the bankruptcy of Kika/Leiner. The fact that the construction sector is currently weakening also puts pressure on turnover.
In almost all retail sectors, competition from Chinese stores Temu, Shein and Co. is hurting. Trefelik calls for the rapid abolition of the 150 euro duty-free limit and says that Europe must protect domestic traders here, who cannot keep up with Asian spot prices.
Tough commercial negotiations are underway
Due to the difficult situation, employers are once again preparing for tough collective bargaining negotiations. The traditional wage rounds will take place again in the autumn. Last year, these lasted until the end of December. Trefelik sees no reason why this should be any easier this year. Some union members are currently in ‘election campaign mode’.
The fact that inflation is lower this year does little to alleviate the situation. “In three years, we had wage cost increases of 20 percent. At some point, it can no longer be done,” the representative emphasizes.
A small glimmer of hope is that, at least when it comes to the labor shortage, new potential is emerging. According to research by trade researcher Christoph Teller of the JKU, ten percent of employees are prepared to continue working after retirement age. Among the 55-plussers, who are closest to retirement, even 20 percent say so.
Working after retirement is not enough
“We need to mobilize the workforce where they are,” says Teller. However, a downside is the less than ideal framework conditions. For fiscal and legal reasons, it is currently not particularly attractive to continue working after retirement age.
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.
