Grocery Store Closures in Rural Areas: More and More Small Communities Without Local Suppliers

Currently, 69 percent of municipalities with fewer than 500 inhabitants and 43 percent with fewer than 1,000 citizens do not have a grocery store within the municipal area. From 2011 to 2023, the number of municipalities without a location increased by 6.2 percent.

Two out of three small municipalities no longer have a grocery store

Currently, there are 389 municipalities without a local supplier. 411,000 people live in municipalities without a local supply business. The KMU Research Austria did not count any bakers or butchers in this regard.

The highest proportions of municipalities without grocery retailers are recorded in Burgenland, followed by Tyrol and Upper Austria. Calculated by the proportion of the population without supply, Burgenland is in the worst position, followed by Lower Austria and Upper Austria. According to KMU Research, there were still 101 grocery retailers per 100,000 inhabitants in 2022, and 99 in 2023.

Trade chairman warns of "existential threat"

"Persistently high energy, wage, and raw material costs, rising fees, and increasing bureaucracy are massively burdening many local supply businesses. As the study shows, the situation for the mostly self-employed merchants in rural areas is becoming increasingly existentially threatening," warns Christian Prauchner, chairman of the food trade in the Chamber of Commerce. He called for relief in energy, taxes, and regulations at a press conference on Friday.

In response to accusations that the food trade is among the price drivers, Prauchner stated: "I can't imagine more advertising and more competition than in the food trade." The margins would be between 0.5 to 1.5 percent, many small retailers would only make between 500,000 and one million euros in sales and often have to get by with only 1,200 to 1,500 euros net per month - without vacation and Christmas bonuses, as he emphasized.

Skepticism Towards Tax Measures

A reduction of the VAT rate from the current 10 to a temporary 5 percent is deemed unnecessary by Prauchner. "One-time effects achieve nothing," says the grocer. Additionally, a simultaneous increase of the standard tax rate from 20 to 21.5 percent would be a reallocation "from the left pocket to the right" with the "watering can" approach.

Creative ideas are needed, and Prauchner has some suggestions: In small communities, where the grocer is the only local supplier, tobacco and taxi services could also be offered, as well as prescription medications if the local doctor does not have a pharmacy. Discussions about longer opening hours, if desired by the retailer, should also be considered.

Criticism of Container Shops

The trade chairman is not pleased with container shops, which are sales areas with 24-hour opening times and no staff on site. He is not against new ideas, but for adhering to legal frameworks. All other 9,100 branches of the grocery retail sector must also comply with them.

Although the retail sector agreed on a two-year collective agreement last year, the high inflation due to a corresponding contract clause will most likely lead to renegotiations this year. Prauchner expects this, but he does not want to interfere. Just this much: There has been an "explosion" in personnel costs - at the same time, Prauchner also emphasized the importance of strengthening purchasing power. The biggest problem is the high energy prices. This also complicates necessary investments, which many can no longer afford. Additionally, there is often the difficult search for successors for the businesses.

(APA/Red)

This article has been automatically translated, read the original article here.