Positive signals for Christmas business in the retail sector
Published: Thursday, Nov 21st 2024, 12:50
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Thanks to the renewed decline in inflation, Christmas business in the retail sector is likely to improve again. The outlook for 2025 is also cautiously positive.
Researchers at the consulting institute BAK Economics expect positive Christmas business in the Swiss retail sector after high inflation had dampened business in 2023, according to a study published on Thursday. However, inflation has now decreased significantly over the course of the year.
In the food retail sector, at 0.7 percent, it is clearly below overall economic inflation. Prices have even fallen in the non-food sector. According to the researchers, the subdued inflation is likely to continue in the fourth quarter and thus help the Christmas business.
Stable prices expected in 2025
BAK researchers expect prices in the Swiss retail trade to remain stable in the coming year. However, there will be considerable differences depending on the product segment. Food is expected to become 0.6 percent more expensive and prices in the fashion segment are expected to rise by 0.5 percent. In the remaining non-food segment, such as electronics and household products, prices are expected to fall by 0.5%.
However, consumer sentiment is expected to remain subdued. They are still feeling the effects of the recent surge in inflation and rising health insurance premiums are also dampening sentiment, according to the report. The experts at BAK are therefore only expecting a slight increase in demand of 0.5 percent, after 1.0 percent this year. The clothing and footwear retail sector in particular is likely to feel the effects of the poorer mood and competition from foreign online retailers.
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