Challenges of the retail sector: retail has become more crisis-resistant

Structural obstacles that hold back the market

• 

  Low consumption: the Hungarian consumption rate is subdued compared to the EU average, and the uncertain environment strengthens the willingness to save.

• Border competition: the draining effect of shopping tourism brings continuous price pressure and price reductions to border food retailers.

• Ripple effect of housing construction: the lower level of new housing construction also restrains demand for household appliances and equipment.

• Unserved settlements, concentrated network: the store network is geographically uneven; In several hundred settlements, even convenience stores are not operating, which also reinforces the narrowing of shopping space.

• Mall market trap situation: it is not worth it for large chains to enter below a certain floor area, and mall operators are reluctant to take the risk of later underutilization.

• Rapidly changing shopping habits: due to the younger generations, long-term, more fixed property leases are becoming less attractive to chains for.

• Labor shortage: the sector is characterized by continuous recruitment pressure and wage competition.

Why can’t retail be “written off”?

The challenges have forced the players to take a forced path: operations have become more efficient, more crisis-resistant, and the sector’s contribution to GDP remains significant. Several chains have also seen revenue growth, while developments (modernization of shopping spaces, opening of new units) have not disappeared from the agenda.

Digitalization and AI: accelerating adaptation

As part of efficiency efforts, smart solutions and artificial intelligence have gained in value: according to the document, the corporate application of technologies is spreading spectacularly. The domestic market is not yet forced to make such “reversals” as were indicated, for example, by the discussions around self-service checkouts in the USA, while communication with the regulatory environment and advocacy remain on the agenda.

Competitive advantage is created where the future customer is understood first

Changing customer expectations represent not only a risk, but also an opportunity: the chain that more quickly identifies how, where and why the “next” consumer will want to shop – and adjusts its operations and innovations accordingly in a timely manner – may gain an advantage.