Retailers in Slovakia report declining consumer spending amid rising costs, with many people opting for discounted products as stores face significant challenges.
In Slovakia, recent statistics indicate that consumers are cutting back on spending and saving more money, a trend that has raised concern among retailers. The latest data available is from December, leaving ambiguity as to whether this behavior marks the beginning of a long-term trend or is merely a temporary fluctuation. Retail industry insiders have noted that while people are shopping less overall, there has been an increase in purchases of discounted items, reflective of tightened household budgets.
Lenka Janeková, the owner of Lara Bags, a retail store selling handbags and luggage, has observed a worrying decline this December compared to previous years, specifically comparing it to 2008. She highlights that the economic context is far more severe now, with elevated costs for wages, energy, and rent. Since the COVID-19 pandemic, her business has experienced a staggering 30% increase in operating costs, further complicating the outlook for retailers. In fact, her store recorded a year-on-year sales drop of 3.6% in December 2023, which reflects the general trend among brick-and-mortar stores facing tough economic times.
The challenges in the retail sector could have broader implications for Slovakia’s economy, especially if the trend of decreased spending continues into 2024. Many businesses may need to implement layoffs or consider closing down if the situation does not improve. As consumers remain cautious and focus on savings, the retail landscape will likely need to adapt to changing behaviors, which could reshape the competitive landscape moving forward.
