Austrian fashion trade records poor first quarter
Despite favourable economic conditions, austrian fashion retailing recorded its worst first quarter in more than ten years. This is proven by the figures collected by SMEs research on behalf of the Austrian Federal Economic Chamber (Non-university, independent research institute in the field of application-oriented economic and social sciences).
A double-digit decline was already recorded in February. The month of March also showed no improvement: sales figures in the stationary fashion trade fell by 5.8 percent. As a result, there was a decline of 4.7 percent after the first quarter compared to the previous year.
The Easter business, which was in March this year, did not lead to an increase due to the uneconomical weather. The poor performance of the fashion trade in the first quarter is due to the high figures from the previous year. In March 2017, for example, sales in imperial weather were 5.8 percent higher than in 2016. On a positive note, March sales were a about 1 percent higher than in 2016, indicating an interaction with weather conditions. It was cloudy and cold throughout March. This shows that the revenue distribution depends on the weather. Sales were worst in the southern states from Austria, where most of the rainfall occurred. As a result, the decline in sales amounted to almost 10 percent. In the western countries, however, temperatures were almost at the previous year’s level. Sales in Vorarlberg, Tyrol and Salzburg declined by just under 3 percent. As in February, smaller companies with annual sales of less than 4 million euros did not suffer as much loss in sales as large companies beyond this sales threshold.
Development of customer frequency in the first quarter
In addition, there are some problems with the development of customer frequency. It also decreased in the first quarter. Even if only by 2.6 percent. It can be concluded from this that the fashion trade did not succeed in selling as much to customers who came to the stores as in the previous year. In summary, this means that only about half of the decline in sales was due to few customers. The other is due to fewer purchases per customer.
Stationary retail overall in the black
The stationary retail trade as a whole did not have such problems. Overall, the industry grew by 3.6 percent in March and by 1.4 percent in the entire first quarter. The frequency showed an insignificant decrease of 0.8 percent. “Above all the toy retail trade, the book and stationery retail trade but also the food retail trade profited from the shift of Easter”, states the KMU research in addition.
Toy trade leads the industry ranking
With an increase of 7.3 percent for the quarter, toys are at the top of the industry ranking. In second place comes the food trade with an increase of 4.5 percent. With a sales increase of 3.8 percent, the sporting goods trade seemed to benefit from the long winter. The shoe trade, on the other hand, was hard hit by the harsh winter. The latter suffered losses of 9.7 percent.
Economic upswing continues
The economic research institutes forecast a continuation of the economic upswing. In nominal terms, according to WIFO, gross domestic product should even grow by 4.9 % this year and consumer spending by private households by 3.7 %. Unemployment is at its lowest level in five years and incomes are rising. This means that the fashion trade is ideally placed to report black figures after the poor first quarter.
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