Over 2,000 Retail Outlets Closed in Hungary in 6 Months

Many have warned that retail closures could intensify this year, most of which have been put off until the second half of the year due to worsening problems. However, the first half of the year has already seen some very negative numbers, with more than 2,000 retail outlets closing down, the financial website portfolio.hu writes.

Across the country, retailers are facing increasing difficulties, and the problems are now so great that not everyone can afford them. Labor shortages and a 20% increase in the minimum wage have pushed up wage costs, and purchase prices are hitting new highs, which they are trying to pass on to consumers, so that food prices in Hungary are now more than 40% higher.

No other EU country has seen such a rapid price rise. Meanwhile, the price freezes put small shops in particular in a difficult situation, as they sell fewer products (so they would have to spread the losses of the price freeze over fewer products), while they are more expensive than multinational chains. The sector is also hit by special taxes imposed by the government, although this is mostly on the larger chains.

Of the 2,084 shops that closed, nearly 450 were food and drink shops, while 180 grocers went bankrupt in six months. Nearly 400 clothing shops and almost as many craft shops were forced to end their trade, while 150 second-hand shops also closed.

If the trend in the first half of the year continues – and does not strengthen further – more than 4,000 retail outlets could close this year, the website notes. In other words, it is very likely that this year's closures will be higher than the 2,500-3,500 number typical of recent, years. “This is, unfortunately, the optimistic scenario, as the second half of the year is much more difficult than the first half, so we could easily see even worse figures than the first half, which would mean a total of over 4,000 store closures this year,” the news site points out.