WIFO sees continued tense situation in domestic retail

"Against this background, the real value added in trade is expected to decline by 0.2 percent in 2025 - it is not until 2026 that a higher willingness to spend by private households on a broader basis is expected again," said WIFO economist and co-author of the current retail economic report, Jürgen Bierbaumer.

Strong Sales Increase in Domestic Retail in June

The strong real sales increase in June of this year by 3.6 percent in retail (excluding motor vehicles) was a short-term positive - after an increase of only 0.7 percent in May. Overall, however, the consumption dynamics remain weak. Therefore, only "slight price-adjusted growth" is still expected. "After all, the mood of domestic consumers has gradually improved in recent months," emphasized Trade Association Managing Director Rainer Will in a statement on Friday. However, the Trade Association continues to complain about existing "structural challenges" such as rising energy and personnel costs, as well as high raw material prices on world markets.

Continued High Inflation in Austria

Rising inflation is causing concern. At 3.7 percent, inflation in July was almost twice as high as the average for eurozone countries (2 percent). "This means that the higher price increase in Austria continues in international comparison," noted Bierbaumer. The expenditure group housing, water, and energy had the strongest influence on inflation. Economic growth remains weak - in the second quarter of 2025, the overall economic performance increased by only 0.1 percent compared to the first quarter of 2025.

Increase in Insolvencies in Domestic Retail

The number of insolvencies in trade also rose rapidly by 6.9 percent to 185 in the second quarter compared to the same period last year. At the same time, employment in retail is declining. In July, 333,000 people were employed in the sector - a decrease of 2 percent compared to the same month last year. At the same time, there are currently about 11,000 unfilled positions, 9,000 of which are full-time.

(APA/Red)

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