Did you hear that the government wants to replace all foreign food stores?
Interestingly, this is not a new plan since the government declared first in 2010 that they would like to increase the share of Hungarian businesses to 50 pc in the retail sector. However, g7.hu says that this does not mean getting support to increase Hungarian companies’ competitiveness but the administrative repression of foreign chains.
Though the government was very successful in increasing the share of Hungarian companies in the energy and bank sector or the media, they did not reach their goal in the retail sector. Most of the Hungarian consumers still visit British and French hypermarkets, German discount stores, and Austrian supermarkets. And the overall view does not indicate any favourable changes for the government since Aldi, Lidl, and Penny Market are expanding while country stores are suffering because they are losing their consumers, g7.hu reported. Therefore,
they will receive a lot of financial allowances in the next EU support cycle.
Former Minister of the Prime Minister’s Office, János Lázár, who now serves as the leader of the rural development commission, said last year that the retail trade of grocery items has to be dominated by Hungarian businesses, and the power of foreign chains needs to be broken. According to him, chains of foreign retail trade need to be pushed out of the country in favour of independence, national autonomy, and the reorganisation of agriculture.
He plans to do that, among other means, by taking advantage of additional taxes and levies.
That means that the government would like to reach their goal not by increasing Hungarian companies’ competitiveness but by the administrative repression of foreign chains. Therefore, g7.hu compared the efficiency of German (Aldi, Lidl, Penny Market) and Hungarian food chains (CBA, Coop, Reál).
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Based on the numbers, one German supermarket reached a trade level four times higher in 2016 than the Hungarian ones. Moreover, this rate worsened in the last three years, and today, the difference is sixfold. Furthermore, one worker in a Hungarian supermarket generated approximately six times as much income as their counterpart working for a German company. Meanwhile,
German owners can spend two times as much money on their workers as their Hungarian competitors.
Finally, Hungarian food chains are more expensive than German ones. Based on the subjective comparison of g7.hu, Príma, a Hungarian food chain, is 14 pc more expensive than the average of Aldi and Lidl (they compared the price of the same basket of goods).
As a result,
g7.hu says that foreign food chains are more effective than Hungarian ones.
Therefore, if the government pushes out foreign chains, that can result in higher food prices.
Source: g7.hu
5 Comments
Well as interesting as this is I think having a wider choice of food is more important from a retailer rather than the same old usual foods you get from a Hungarian market store. I wonder if you looked into the wages of said stores in comparison here in Hungary?
Alot of people I know avoid Hungarian stores as they are over priced for what they are selling. Probably just greedy owners of said store but they band together pleeding poverty yet making a profit under the Hungarian owned banner bleeding the natives poorer.
Oh well. Lets try and get on with each other rather than banning more choice from forign stores.
Unfortunately, The Hungarian owned food shops hurt themselves because they DO NOT offer what their customers want. SERVICE, SELECTION, VALUE for the money. Most of the Hungarian shops do NOT think they have to be responsive to customer request. They think that they are still operating in Communist era Hungary.
If the folks in the Hungarian government manage to drive the foreign owned shoppes out of the country they will be doing a great disservice to ALL Hungarians and others whom live here in Hungary. This agenda to harm foreign owned shops that have heavily invested in Hungary and employee tens of thousands of Hungarians reaks of political favoritism and unfairness of the greatest magnitude.
SAY NO TO driving out the big chains that are foreign owned. If this succeeds it will harm other future foreign investments in the country. It will be a black eye upon the credibility of the entire nation.
The foreign food retailers offerings here in Hungary are not that great compared to their stores in the West, the product range is much smaller. However, the Hungarian chains have an even smaller product range, very limited in choice and seemingly geared to what my grandmother used to cook in the 1930’s in Kispest. Times have changed, tastes have changed and until homegrown supermarkets realise that, they are doomed to little being more than over priced convenience stores and off licences..
After covid- communism will make a new form of return…. Future looks dark
So we can expect the same for IKEA, Praktiker, OBI, Metro, Möbelix, Mömax, MediaMarkt to name but a few. It may start with supermarkets but where does it go next. So, if the government doesn’t want competition the shops are squeezed out. Unless the CBA supermarket expands their range to cover everything Tesco or Auchan sell, then what happens. The village shops are always busy. At a time where jobs are few this is not the way forward. If some Hungarian products are more expensive then of course people gravitate towards cheaper non Hungarian items. Hungary pays the second lowest minimum wage in Europe. Sometimes I think this country doesn’t know what it’s doing.