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From January to November 2020, retail sales fell 5.6 percent. The main losers from the crisis are motor vehicles and wholesalers, as well as fashion and toy retailers.
The corona pandemic with blockades that lasted for weeks hit many areas of commerce hard. Nominal turnover in the retail, wholesale and motor vehicle trade decreased by € 15 billion or 5.6 percent from January to November 2020. Revenues fell particularly sharply in 2020 for clothing (-25 percent percent), toys (-20 percent) and shoes (-17 percent). The winners of the sales crisis are retailers in the online (+17 percent), grocery (+9 percent) and furniture (+5 percent) sectors.
In 2020 there was a nominal increase in sales of 0.1 percent in retail as a whole. From January to November, there was 7.2 percent less revenue in the wholesale and 11.6 percent less in the auto industry. Figures are based on preliminary data from Statistics Austria and were analyzed by the Economic Institute on behalf of the WKÖ Chamber of Commerce. “With a few exceptions, the crisis hit all business sectors hard,” WKÖ business officer Rainer Trefelik told an online press conference on Friday. “The average value does not reflect the real situation.” It is necessary to deepen in the industries, also at the regional level.
Damages due to gastronomy and tourism failures
The food and hospitality industry, considered a major frequency generator for retail, was also out of service for a long time due to a shutdown. Food wholesalers also lacked tourism companies as clients. The WKÖ commercial president also referred to different levels of impact within individual industries, such as the sporting goods trade. Business in eastern Austria and the metropolitan areas was much better in contrast to the winter sports areas, Trefelik said. Among other things, there was a boom in bicycles. According to the commercial president, toy retailers suffered from competition from online retailers and supermarket and pharmacy chains that also sold toys during the shutdown.
Increasing the savings rate hurts trade, but has future potential
In the crown crisis, people in Austria reduced their consumer spending and the savings rate doubled. “Due to hard locks, certain purchases and trips were not possible,” said Peter Voithofer of the Economica Institute for Economic Research. However, due to the high savings rate, there is the possibility of future consumption. The different development of sales in the retail sector due to the corona pandemic is a unique exception for Voithofer. “We will hardly ever see that again.”
Corona’s financial aid, tax and duty deferrals, and short-time work have so far prevented a wave of bankruptcies and a host of job cuts in the retail industry. Employment fell 0.9 percent in 2020 compared to the previous year. The sector currently employs some 550,000 full or part-time employees and another 50,000 on a marginal basis.
No wave of bankruptcies expected
WKÖ trade president Trelefik doesn’t expect a big wave of trade insolvencies. With the help, a network was created with which the crisis should be possible. “But every bankruptcy is too much,” said the industry representative. Some retailers, for example in the fashion sector, had business problems even before the crown crisis. “How quickly trade will recover in the current year is also highly dependent on the further course of Covid 19 infections and associated measures,” Trefelik said. Retail researcher Voithofer expects a rise in bankruptcies, “but not a big steep wave,” and predicts a stronger rise in non-bankruptcy closings.
WKÖ Commercial Division Managing Director Iris Thalbauer once again called for a level playing field for domestic trade with foreign online providers. “We are concerned here with fair taxation and a level playing field in tax law,” Thalbauer said.
Trade association calls for “Corona master plan”
The trade association also spoke on Friday. Industry representatives are demanding a government crown master plan with the following three priorities: safeguarding and creating jobs, preventing bankruptcies and strengthening equity, as well as further digitization and “digital fair play” with the online giants. “Accompanying this is a temporary Covid job security bonus for the time after the end of short-time work to secure jobs permanently,” said Rainer Will, Managing Director of the trade association.
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