Representing interests – irrespective of company size

By: Budai Klára Date: 2024. 06. 24. 11:16

In the following interview Dr Tamás Kozák, secretary general of the National Trade Association (OKSZ) analyses the biggest challenges and successes of the Hungarian retail trade sector in 2023.

This article is available for reading in Trade magazin 2024/6-7

– What were the biggest challenges and achievements in Hungarian retail trade last year?

Dr. Kozák Tamás
főtitkár
Országos Kereskedelmi
Szövetség

– 2023 was a very difficult year for retail. Household consumption decreased: retail sales were down almost 8% year-on-year and it shouldn’t be forgotten that even volume sales reduced in food and food type stores. It should be an important warning sign for economic policy makers that retail trade is making a diminishing contribution to the GDP.

– How do you evaluate the retail sector’s performance in the first few months of 2024? Are there any visible trends or changes compared to 2023?

– A modest recovery has finally started. If the projected GDP growth is sustained and inflation is managed well, real incomes could rise and retailers could get back on track. One of the biggest risks this year is the budget deficit.

– What new technological developments or innovations are affecting the retail sector and how are they influencing market dynamics?

– Digitalisation and understanding and using internet-based technologies are the biggest challenges for the sector. We are still learning about the concept of artificial intelligence, but it won’t be long before the role of management or experts in business decisions changes fundamentally. This can also lead to significant efficiency gains. Retail underwent a huge transformation in recent years, driven by two main factors: technology and changing consumer behaviour – and let’s not forget the pandemic or the war in our neighbourhood.

– What kind of changes in consumer behaviour have you observed and what strategies are retailers adopting to meet new type demands?

– The new buzzword is omnichannel. Both offline and online channels are playing a role in the shopping process. What we also see is that convenience and customer experience are becoming more important in addition to product price.

In recent years, retail has undergone a huge transformation driven by technology and changing consumer behaviour

– What macroeconomic factors have the biggest impact on the performance of retail trade at the moment? How is the sector preparing for the challenges?

– In addition to the macroeconomic factors mentioned earlier, the predictability of legislation is another big challenge for companies. For instance retailers would like to have enough time to prepare before a piece of legislation comes into force. There are some regulations that fundamentally determine the profitability of large companies, e.g. surtax, mandatory price discounts, etc.

– What do you expect from the retail sector in 2024? What are the plans and objectives of OKSZ?

– As retail trade is a key sector of the Hungarian economy, the performance and management of companies matter very much in the country’s competitiveness. Retail is a sector that is essential to the recovery of the domestic economy, as it is a key element of the macroeconomic ecosystem. There are few other fields of the economy where such diverse and varied business models exist, or where customers are served through such a wide range of distribution channels. The retail ecosystem is also diverse in terms of distribution channels, and these segments can be further subdivided by sales channel, store type or product group sold. //