Revenues declining in some areas of the Swiss retail sector
While some retail segments were still able to benefit from circumstances during the pandemic last year, this year has seen an overall decline in revenues. This affected the food and near-food segment in particular, where nominal revenues dropped by more than 4%. The non-food segment posted a decline of 1.2%.
According to estimates, however, nominal revenues across all sectors contracted by 2.6% relative to 2021. The reasons for this stem mainly from the fading effects of the pandemic, but also from gloomy consumer sentiment resulting from increased energy costs and inflation. Nevertheless, the Swiss retail sector is up on pre-pandemic figures, enjoying a gain of 5.7% relative to 2019.
Every year, the Credit Suisse Retail Outlook provides insights on the Swiss retail trade. This year, the study focused on the competition for employees as well as the consequences of increasing digitalization. In the latest Credit Suisse Perspectives video, moderator Carolin Roth talks to the authors of the study about the results and the future of the industry.
- How did the Swiss retail sector perform in 2022? Carolin Roth discussed this subject with Meret Mügeli, economist and retail specialist at Credit Suisse, and Martin Hotz, managing director and owner of Fuhrer and Hotz.
- Online or in person, how do Swiss people prefer to buy? The answers of consumers, directly on-site.
- Swiss retail companies are finding it increasingly difficult to inspire young people to work in sales. Why? The reasons were discussed in an interview with Meret Mügeli and Martin Hotz.
- "Within the last year and a half, we have seen more than double the number of advertised vacancies." With such statements, Michel Ganouchi, responsible for employer attractiveness at the Migros Group, showed how acute the shortage of skilled workers is in the sector. Watch the video to see what else he shared.
Would you like to find out more about the situation of the Swiss retail sector?
Credit Suisse Perspectives: Retail Outlook 2023
Things remain exciting in the Swiss retail trade. Do you want to know more about this?
Every year, the Credit Suisse Retail Outlook provides insights on the Swiss retail trade. This year, the study focused on the competition for employees as well as the consequences of increasing digitalization. In the latest Credit Suisse Perspectives video, moderator Carolin Roth talks to the authors of the study about the results and the future of the industry.
- How did the Swiss retail sector perform in 2022? Carolin Roth discussed this subject with Meret Mügeli, economist and retail specialist at Credit Suisse, and Martin Hotz, managing director and owner of Fuhrer and Hotz.
- Online or in person, how do Swiss people prefer to buy? The answers of consumers, directly on-site.
- Swiss retail companies are finding it increasingly difficult to inspire young people to work in sales. Why? The reasons were discussed in an interview with Meret Mügeli and Martin Hotz.
- "Within the last year and a half, we have seen more than double the number of advertised vacancies." With such statements, Michel Ganouchi, responsible for employer attractiveness at the Migros Group, showed how acute the shortage of skilled workers is in the sector. Watch the video to see what else he shared.
Would you like to find out more about the situation of the Swiss retail sector?
Swiss retail sector facing a shortage of skilled and unskilled labor
Retail has also been dealing with a strained situation on the labor market. Many sectors suffered from a shortage of skilled workers in 2022. The third quarter of 2022 saw the number of people registered as unemployed in the retail sector drop to the lowest level in ten years, while the number of vacant positions reached record highs. This development is not solely attributable to workers leaving the workforce during the COVID-19 pandemic, however, and is also related to the low numbers of new workers entering the sector and the lack of young talent.
These issues are likely to remain relevant in the future as well. One reason for this is the impending wave of retirements that will come to pass when the baby boomer generation reaches retirement age. From a long-term perspective, it will most likely prove worthwhile to take measures to combat the shortage of workers now. New approaches are needed in order to recruit and retain new employees. According to a survey by Fuhrer and Hotz, factors such as an appreciative management culture, flexible working hours, and professional development opportunities could have a positive impact.
Online retail continues to ride wave of success
Since the pandemic, online retail has been soaring in Switzerland. This trend has continued unabated even after the reopening of brick-and-mortar businesses. While the younger generations have already been doing most of their shopping online for some time now, it is now clear that older consumers are making digital purchases more frequently too. Overall, roughly 71% of Swiss people have purchased something online in the last three months. Most orders were placed in the clothing, shoes, and accessories segment, which accounted for roughly 45%, followed by the consumer electronics / household appliances segment and the furniture / household goods / garden products segment, each at roughly 26%.
This trend is likely to develop further in the future. The key word here is "social commerce." Due to the increased use of social media, offering goods for sale directly on social media platforms is becoming an attractive option for retailers.
Slight growth in the Swiss retail sector projected for 2023
What does 2023 hold in store for retail? Switzerland's economic growth will most likely slow down in 2023 due to the bleak outlook for the global economy. The retail sector, however, is expected to see slight growth in revenue thanks to immigration and the stable labor market. This applies to both the food/near-food segment, which is expected to grow by 2.1%, and the non-food segment, which is expected to grow by 0.8%.
Although inflation will probably top out at 1.5% for 2023 and oil prices are not expected to rise further, consumers' wallets will also probably be a bit tighter than before in the year ahead. This is due to the prospective 6.6% increase in health insurance premiums as well as higher maintenance costs for housing.