Image: Wels Marketing
Instead of sales blessings and Christmas peace, retailers are confronted with a slump in consumption and warning strikes. The Christmas-related December net sales of 1.25 billion euros will be almost 200 million euros below the previous year, and for the year as a whole retail sales are likely to be down 3.6 percent in real terms at 75.3 billion euros net , shows a Wifo forecast.
“There has hardly been anything like this on this scale,” said the managing director of the trade association, Rainer Will, at a press conference on Thursday. Due to the high price increases, consumers would start saving heavily. While the average planned Christmas spending per person was 395 euros last year, it is now 360 euros. In 2021 it was still 463 euros.
Warning strikes “not optimal”
The warning strikes in retail due to the stalled KV negotiations are not optimal, although sales have hardly been influenced by them so far, said Will. “Barely doesn’t mean not at all.” The conflict must be moved from the street back to the negotiating table. Employers are currently offering a salary increase of 8 percent. Given the current situation in retail with declining sales, bankruptcies and closures, Will believes this is a high offer that will likely result in personnel savings. “Otherwise the only option is bankruptcy or quiet closure,” said the stakeholder.
The union continued its warning strikes on Thursday. There were hourly work stoppages and public actions at dm, Bipa, Lidl, Hofer and Eurospar, among others. The sixth round of negotiations for a new collective trade agreement will take place on Friday. The union is insisting on an increase of at least the level of annual inflation. That would be 9.2 percent.
A third are planning to cut staff
Will admitted that a third of retailers are already planning to reduce their workforce by 2024 in order to secure their economic existence. “We have to reach a compromise and cannot risk mass bankruptcies.” Will referred to figures from the creditor protection association KSV1870, according to which retailers are leading the insolvency statistics this year with 1,003 bankruptcies.
Things are particularly bad for the furniture and electronics trade, but the clothing and shoe trade is also in the red. In the book trade, the Christmas business is working “great,” said Will. But that doesn’t make up for the eleven months before, which went badly. This year, 4 percent of booksellers had to close.
But Wifo is optimistic for 2024. Due to the high wage agreements, real disposable incomes will rise sharply, which will also benefit retailers, said Jürgen Bierbaumer from the Wifo economic research institute.
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