Energy crisis: Will Hungary face a dark Christmas?

Christmas has a huge importance in Hungary, just like anywhere else in the Christian world. However, due to the energy crisis, this year’s Christmas will be quite different. According to the forecast of trade unions, people will likely celebrate in a way more modest way. As Hungary saw the greatest price hikes in many aspects, the question arises: How will people celebrate this year’s Christmas?

Retail shops and malls do not expect huge traffic during the holiday season. Food still tends to be the first priority for families, however, the rising utility costs also add a great burden. Purchasing new clothes or electrical devices has lost importance due to customers’ limited spending power. Besides, it is unlikely that malls will lower their rent prices anytime soon, which further exacerbates the situation for owners. It is feared that many shops will not survive this winter. The two exceptions might be large international chains and convenience stores.

The winter is coming

Zoltán Karsai, the chairman of the Trade Union of Trade Employees, said that the high utility prices would cause difficulties for many. He also highlighted in the report of ATV.hu that the price stops on certain items would be an added hardship for retailers. However, he does not think that the issue would be as severe as economists had previously forecasted. Csaba Bubenkó, the chairman of the Trade Workers’ Independent Trade Union, said that between 2019 and 2020, 4,000 people lost their jobs in the trade sector. This is a problem as the workload for individuals is rising drastically.

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While it is true that the number of shops decreased, the area of shops also increased at the same time. This mostly affects small shops while larger stores can get through hard times more easily. The likeliness of a shop’s survival depends on its reserves, which are usually smaller in the case of retail stores. Owners may resort to dismissing a number of their employees in order to cut down on expenses. There is also the problem with prices as larger shops receive more favourable rates from suppliers. Shorter opening hours or occasional 24-hour closures could serve as solutions though.

While the government aims to ease the burden on families with price stops, this hurts businesses. Retailers are trying to minimise their losses by increasing the prices of items that are not affected by the price stops. This usually means basic necessities that customers buy either way, even if the prices go up.

As for Christmas, people will still spend money on gift items to keep the holiday spirit alive. It will be a more modest celebration compared to previous years, but it will be a celebration nonetheless.

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Source: atv.hu