Shopping: bunker atmosphere and toxic cocktail in retail

LINZ. Austrians are still in crisis mode and are spending less money on purchases of all kinds. “There is a bunker mood among consumers,” says retail expert and JKU professor Christoph Teller in an OÖN interview, summarizing his institute’s latest analysis. 60 percent of households say that the budget available for shopping has shrunk in the past three months. In April 2023 it was 52 percent.

The most important reasons why Austrians pay more attention to their spending are, for 43 percent, the additional spending on housing (rent, electricity) and for 25 percent on transport (gas, car). 14 percent generally have less income available, and eight percent have recently spent more on vacation and leisure and now have to save money when shopping. Of course, this hits retailers massively. “It’s a toxic mix for retail,” says Teller.

On the one hand, sharply increased costs are putting retailers under pressure, but on the other hand, they are selling fewer goods, even if nominal sales are still increasing in some cases (due to price adjustments). The fashion trade in particular, which already has autumn/winter fashion in its stores, is currently feeling “cold and warm”, according to the retail expert. “Who buys a winter coat when it’s more than 25 degrees?”

The crisis mode has already become entrenched in the minds of people, especially those with low household incomes. “The retail industry is feeling this the most.” Many traders are no longer making profits and the wave of bankruptcies is already rolling. In the short term, traders can navigate such crises, but “no one can hold their breath to dive through forever.” But there is no end to the purchasing reluctance in sight in the short or medium term.

Online retail is not doing much better than stationary retail, says Teller. In reality, retailers would have to invest more in advertising during the crisis in order to generate additional sales, but they often cannot do this because they have to use all their money to cope with fixed costs. Retailers are still trying to counteract the negative consumer climate with promotional products.

And for good reason, because almost three quarters of Austrians still pay more attention to promotions when shopping, although this figure has fallen slightly compared to the previous quarter. In addition, this is a double-edged sword for consumers and retailers. “Actionitis is like heavy drugs. They make everyone high for a short time and make everyone sick in the long term.”

(uru)

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