Retail trade in turbulence

This article is available for reading in Trade magazin 2025/11.

Dr. Tamás Kozák 
secretary general
OKSZ

In recent years trade regulation has often been determined by political goals. The influence of “narrative economics” on the sector is tangible: messages are often more important than numbers. Irrational rules hamper practical operations. Companies above the HUF 100bn revenue threshold are subject to completely different assessments, and the 400m² sales area arbitrarily regulates store types. The new version of the shopping mall building ban even makes change of ownership subject to a permit. It is equally difficult to explain the restriction on the proportion of private label products in drugstores, where the supplier structure is completely different from that of grocery retailers.

High prices stayed with us after the price freeze

Price indexes clearly show that in the second quarter of 2025 the annual price increase for food and non-alcoholic beverages stayed at around 5-6%, meaning that prices remained stuck at a persistently high level. According to sales data, households purchased less food than in the first quarter of the year, meaning that the price freeze didn’t stimulate consumption; as a matter of fact, demand declined. However, consumer perception has an even stronger influence on the market. Consumers don’t remember the short price correction that lasted a few weeks, but they do recall that the price of basic foodstuffs rose dramatically in 2022-2023 and hasn’t returned to its previous level since then. Supply chain data indicate that the centre of gravity for profitability has shifted. While in 2021 retailers had accounted for HUF 20 of every HUF 100 of profit generated at every level of the supply chain, by 2024 this ratio shrunk to 11%. The relatively larger share is now taken by producers and wholesalers rather than stores. The profitability of food manufacturers has remained relatively stable, averaging around 4%.

There is no progress without dialogue and a vision for the future

For the retail sector the most important issue is how to make the operating environment more predictable and efficient. According to Tamás Kozák, the key to this is meaningful professional dialogue, which is almost completely lacking today. When new legislation is prepared, those most affected are rarely consulted, so industry players are often confronted with the consequences after the fact. The secretary general believes that improving competitiveness and deregulation are the main priorities. Numerous pointless bureaucratic burdens slow down retail trade and without removing these it is impossible to talk about sustainable growth. Improving productivity is a key issue and the aging workforce in the sector poses a serious challenge: the proportion of people older than 45 years who are working in retail is increasing, while few young people choose to make a career in this sector. Strengthening the digital competence of SMEs is also crucial.