Difficult year behind and ahead of us

Last year was a difficult one as a result of austerity measures and decreasing purchasing power. Though exact figures are not available yet, the end of the year shopping frenzy seems to have. While a 5-6 per cent reduction was recorded in the sales of durable consumer goods up till November, the drop in the sales of FMCG products was only 1-2 per cent. The saturation of the market also lead to intensified competition. Retail chains which had sufficient financing continued to expand, while independent stores found themselves in an even more difficult situation than before. The increase in the price sensitivity of consumers was a favourable development for discount stores. The appearance of Aldi in this market in 2008 will further boost the popularity of this channel. The black market which is estimated to account for 15-20 per cent of the retail market continued to make life hard for legal retail business although government measures have yielded substantial results in the battle against illegal trade. OKSZ is ready to co-operate with competent authorities in their efforts to get rid of illegal activities in the retail sector. We will discuss the future of marketplaces with the Consumer Protection Authority and the Ministry of Economy and Transport, because this is where a substantial part of the illegal activities take place. We are also working together with the competent government organisation on safety directives for the sale of food. Most retail companies have signed the Code of Commercial Ethics, but it does not seem to be fully functional yet. I would like to encourage suppliers to take advantage of the possibilities offered by the Code to protect their interests. I expect the trends seen in 2007 to continue, which means that 2008 will also be a difficult year, though it is possible that purchasing power will begin to recover before the end of the year.