The retail scissors are still very wide

By: Trademagazin Date: 2023. 09. 06. 12:58

The Hungarian retail sector continues to display a complex picture: while the total sales turnover showed a significant 10% increase in the first seven months of the year, the quantity of goods purchased during the same period dropped by nearly 10%. This gap between sales and quantity sold raises concerns.

Recent data reveals that in the first seven months, retail turnover reached HUF 10,278 billion, marking a 10% growth compared to the previous year. However, the quantity of goods sold, adjusted for calendar effects, decreased by almost 10%. This phenomenon can be attributed to rising prices and a decline in real wages. During the first half of this year, real wages fell by nearly 6%, meaning that the purchasing power this year is reduced to HUF 94,000 compared to last year.

Following the positive surprise in June, Hungarian retail performed in line with expectations in July, delivering overall weak results. Although the annual basis index showed slight improvement compared to the previous month, the monthly retail turnover again contracted. Retail volume in food stores declined by nearly 1% compared to June, and high food prices continue to hinder consumption. Interestingly, even the discontinuation of the food price freeze in August did not trigger the anticipated stockpiling among consumers, as noted by Peter Virovacz, an analyst at ING.

The wide gap observed in the retail sector reveals that due to price increases, Hungarian consumers are purchasing fewer goods for the same amount of money. This situation occurs in times of significant food price increases, exacerbated by a decrease in real wages.