Dr Tamás Kozák: “High inflation casts a long shadow”

This article is available for reading in Trade magazin 2025/6-7.

Dr. Tamás Kozák
general secretary
National Trade Association

How do you evaluate the performance of the Hungarian retail sector in 2024, with particular regard to sales trends and the sector’s adaptability?

-2024 was the year of real wage growth and we were hopeful that household consumption would return to the market with the same or even greater force. However, this didn’t happen and we had to acknowledge the fact that “high inflation casts a long shadow”.

Based on the months that passed so far in 2025, what trends are emerging in the retail sector? Do you see any significant changes in the structure or pace of consumption compared to last year?

-The year started well, with retail sales doing especially well in January, which was a great relief for the sector after a weak December. Then consumers became hesitant in February and this situation was exacerbated by the government’s well-intentioned but drastic intervention, the price cap. Contrary to the government expectations, retail sales were down 0.6% in February and then reduced by a further 0.5% in March.

Price sensitivity has further increased, with a shift from premium brands to lower-priced products, and the popularity of private label products has also grown

Which technological developments, digital solutions or business innovations are shaping the retail market, and how are they affecting competitiveness?

-We are witnessing the conquest of AI at companies where sufficient data and information are available to optimise processes. Robotics lead to efficiency gains and the automation of routine tasks strengthens competitiveness. One of the big questions for the not too distant future is how small and medium-sized enterprises will be able to compete with larger chains.

How did consumption habits change over the past year, particularly in terms of price sensitivity, sustainability expectations and retail channel use? What strategies are retailers using to respond to the changes?

-Price-sensitivity has continued to strengthen, with lower-priced products replacing premium brands and private labels also becoming more popular. The weight of online consumption increased, with 54% of households buying something online in December and average online spending per household reaching HUF 49,500.

Robotisation improves efficiency, automation of routine activities boosts competitiveness

Which macroeconomic factors, such as inflation, real wage trends or the tax environment have the biggest influence on the retail sector? How is the sector preparing to deal with these?

-The underlying trends are mainly determined by real wage developments and consumption patterns. Together, these set a trajectory from which consumers can easily be diverted in a negative direction, especially after an inflationary shock such as the one in 2022-2023. In January the surge in inflation had such a diverting effect.

What do you expect from the second half of 2025 on the Hungarian retail market, and what are the main goals of the National Trade Association this year?

-Our main goal is to phase out the government measures that are hurting retail trade and bring back fierce but fair competition. We are pushing for the abolition of the price cap and OKSZ also wants to have the special retail tax abolished.