A Lot of Grocery Stores Have Vanished from Hungary

A large number of retail outlets, including grocery stores, have been closed in the past decade and a half, and the Hungarian network has shrunk by thousands compared to pre-pandemic levels, the business news site napi.hu reports.

Although average wages are on track for double-digit growth again this year, inflation is spoiling the overall picture. As previously reported by Napi.hu, the pace of real wage growth has slowed this year and the indicator could be negative by September. This week, the Hungarian Central Statistical Office (KSH) published the facts, which show that this is indeed the case, with real wages falling by 1.9% in September, while in the first nine months of the year the real wage index was still more than 5% higher.

And the fall in real wages is dampening purchasing power, which is having a serious impact on retailers. The negative real wage data for September provides an opportunity to explore how the number of retail outlets, including grocery stores, has evolved over the period. More specifically, what has happened compared to the peak in 2005, when there were more than 157,000 retail outlets in Hungary, excluding those dealing in motor vehicles. At that time, there were a total of nearly 49,000 grocery shops (shops selling a mixture of food and non-food products, according to official statistics).

Ten years later, the complete network consisted of only 133,000 shops, and the number of grocery stores was just over 42,000. Before the outbreak in 2019, only 38,000 out of 117,000 shops were selling food. At the end of June this year, the retail network consisted of less than 110,000 shops, and the number of food shops had fallen to less than 36,000, which means that the network has shrunk by almost 48,000 shops compared to 2005 and by more than 9,000 compared to 2019. The number of outlets selling groceries has also fallen by 34 thousand and by almost 7,000 respectively. The significant long-term decline can be explained in part by the transformation of the retail world, changes in consumer behavior and the rise of larger stores.