Family budgets reshaped for the umpteenth time

While in the European Union retail turnover fell at the same rate as in November 2008, in Hungary it decreased by 4.7 percent in the first four months of 2010, in comparison with the same period a year before. Taking a closer look at the data available we can see that less food was sold, but food products’ share within retail sales was growing, which is a clear sign of impoverishment. In April retail sales were in the value of HUF 606 billion and 47 percent of this was realised by food and food-type products (this proportion is optimally around 20-25 percent). The situation is rather similar in most European countries.

According to Eurostat, the volume of retail reduced by 1.6 percent in the 27 member states of the European Union in April. Turnover managed to grow in only four member states and sales declined in sixteen EU countries. Considerable disparities remain: while internal consumption improved by 1.8 percent in Belgium, in Poland retail turnover fell by 8.7 percent in one month. It is quite probable that a new consumption structure will develop, as the crisis will reshape families’ budgets: the proportion of domestically manufactured products will grow and there will be a shift towards cheaper products. In Hungary people started saving more during the crisis and an increasing number of people try to pay back their loans sooner than originally scheduled. All we need to know now is when will a moderate consumption growth accompany this sensible economising?