Travelling more to see lower prices

According to market surveys, typical Hungarian consumers attempts to compensate the effects of rising prices by going to new stores or turning to new products which means they need to travel more. According to the National Retail Association, not only consumption but the number of retail units has also dropped as the result of restrictive economic policy and recession. Average price in the top 10 food categories monitored by Nielsen was up by 1-28 percent last November, compared to 2007. Prices rises were relatively moderate last year, as prices had already begun to soar in 2006. Consumers find ways of saving money like turning to cheaper segments within a category or looking for promotions systematically, or choosing larger unit sizes. Another way of saving money is to buy private labels. Many consumers manage to continue buying the products they prefer by travelling more, to cheaper stores. For example, sales of cooking oil were up by 60 percent in terms of value in the discount channel last year. According to KSH data the number of retail units dropped by 5 000 last year. At the same time, the total floor space of retail units increased by 63 000 square meters in the first half of 2008 and was up by 121 000 square meters in June, compared to 2007. The changes in the structure of the retail sector are related to changes in shopping habits. The decline in purchasing power has hit small retail units the hardest. The increased popularity of cheap retail channels is already reflected even in statistics.