Huge crisis approaching Hungary? Retail traffic plummeting unstoppably
Shop traffic has been in a free fall in Hungary recently. In February, the contraction reached 10.1 percent. According to an expert, Hungarians spend as much as at the start of the coronavirus pandemic. But then, almost all the shops closed. Now they are open, but Hungarians do not have enough money to spend. Furniture and technical stores suffer the most while traffic in second-hand shops is soaring.
According to rtl.hu, Hungarians are saving money. As a result, the Hungarian Central Statistical Office (KSH) measured a 10.1 percent drop in shop traffic last month. The decrease is as high as it was in April 2020 when the pandemic outbreak made a lot of shops close. Therefore, the masses began to shop online, and most people went to stores only when it was inevitable.
Now, the pandemic is much more quiet. But people buy less and less. Traffic in the food stores dropped by 6.7 percent, and Hungarians bought 14.5 percent less fuel in February compared to the figures a year before. Furniture and technical stores felt the most significant contractions: 19-19 percent. Meanwhile, second-hand shops and vintage stores see more and more shoppers: the increase reached 7.6 percent in February.
The double-digit contraction is significant on an annual basis. Such things rarely happened in the history of the economy, István Madár, the leading analyst of Portfólió, said. Before COVID, such trends took place only after the 2008 global financial crisis. Then, the soaring debts depressed consumption.
Among the reasons, Mr Madár mentioned the sky-high inflation, which is still above 20 percent. Therefore, the real income of people is decreasing, so they lose purchasing power. Thus, even though shop traffic increases, the quantity of the products customers buy is lower. And that can no longer be explained by the termination of the fuel price cap scheme. Now, it is clear that the Hungarians deliberately cut their consumption.
The analyst added that the decreasing consumption would hurt the Hungarian economy. The latest data about the decrease in retail sales and the negative figures concerning industrial production means that the recession would continue in Hungary. That means the performance of the Hungarian economy will fall in the 1st quarter of 2023, he added.
However, fewer consumers mean price rises and inflation will stop. Mr Madár said that pricing might become realistic again, and owners would implement price increases in cases where cost rises make them inevitable.
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2 Comments
Lot of FACT in this article.
WHO will close there DOORS next?
The “tethering” – on the cliffs edge, just holding on – in thousands of business operations, across the broadness of the landscape of the Hungarian Economy – SCARY.
The Illness of our Economy, pricing up-wards STILL occurring across the entire Hungarian Economy, that disables through lack of disposable income Hungarians spending increasing there spending power.
Parallels comparisons to February 2020 – the “lift off ” or BLAST off – the impact of the on-going Virus, to present time – BIG additional WAKE up call to Hungarians, that we are in an ECONOMIC crisis.
Millions of Hungarians in increasing thousands post February 2020 – on-going, the STILL presence of rising Inflation and PRICING throughout the entire Hungarian economy, is MALIGNANT.
Social Inequality – rampant in Hungary – the rich get richer and the poor get poorer, and the term of living in poverty in a position in society of peasantry, continues to INCREASE in an out of control process that factually see’s numbers sky rocketing that are likened to living in a 3rd World country – DISGRACEFUL.
In the Cities, the Towns and Villages of our country – get out there see for yourselves – the cataclysmic disintegration – that is HAPPENING.
WHO do we BLAME – for the continuing DECLINE of our Quality of Life ?
WHO do we BLAME for the IMAGE of Hungary as seen, just not by the European Union or NATO but the WIDER World – who has SMASHED our proud and historic image?
Who RESPECTS us Hungary as a Country through this SMASHED image we display to-day?
Hungarian life for millions is going to GET harder.
During the pandemic people realized that if they get sick or die they are leaving behind a lot of stuff that will end up in garbage because in reality almost everyone already had everything they need: a few pots, basic dishes, clothes to get from laundry day to laundry day, a table, some chairs, a good bed & all the bedding needed for comfortable sleep after a day of hard work. All other things are window dressing. Money spent. Also, since there is always a threat of another pandemic or war as Putin or others keep wanting more land, better to just have sacks or rice, cans/jars of food and lots of toilet paper. Every adult knows that you have to have at least 6 months worth of food & also money to pay utilities for anykind of emergencies…even just illness. So maybe that is the plan…tht people are waking up to the reality of uncertain future.