Austrian Retail Sector Shows Resilience Amid Economic Challenges
Despite ongoing economic uncertainty and cautious consumer spending, Austria’s retail sector has demonstrated stability and moderate growth. According to the latest WIFO & HV Economic Report, the sector achieved a nominal sales increase of 2.7% in 2024, closely matching previous forecasts. While inflationary pressures have eased in some areas, rising energy costs and declining consumer confidence continue to shape spending behavior.
The Austrian Retail Sector has shown growth in spite of econmoic challenges in Austria. / Picture: © lyzadanger
Despite ongoing economic challenges and weak consumer confidence, Austria’s retail sector has shown resilience, recording moderate revenue growth in 2024. According to the latest WIFO & HV Economic Report, commissioned by the Austrian Retail Association, the sector saw a nominal sales increase of 2.7% (real growth of 0.9%), aligning precisely with forecasts from the previous year. This development comes despite Austria falling behind Germany in consumer confidence indicators and an overall cautious spending environment.
The report highlights that total net retail sales, excluding motor vehicles and fuel stations, reached €77.2 billion in 2024. December’s holiday sales were particularly strong, with a 4.6% increase in revenue compared to the previous year, following solid growth in November as well. However, consumer sentiment remains fragile. While declining inflation has bolstered consumer confidence to some extent, rising unemployment has dampened spending. The retail sector’s ability to achieve growth in such conditions underscores its adaptability and stability.
The labor market remains under pressure, with job vacancies in the retail sector declining significantly. In December alone, the number of unfilled positions dropped by nearly 25%, though around 9,300 retail jobs across Austria remain open. Meanwhile, Austria’s savings rate is expected to rise to 12%, reflecting cautious consumer behavior amid economic uncertainty.
Inflation remains a key factor influencing consumer spending. While inflation dropped to 2.0% in December, it rebounded to 3.3% in January 2025, driven by rising energy prices as government subsidies expired, along with increased costs in hospitality and services. In contrast, the inflationary pressure on industrial goods and food has eased, positioning the retail sector as a stabilizing force.
Consumer confidence in Austria has deteriorated, with the EU’s harmonized consumer sentiment indicator dropping to -19.2 points in January. While Germany has also experienced a decline, its consumer sentiment remains comparatively higher at -11.9 points. Austrian households are generally more pessimistic about their economic outlook than their German counterparts.
Looking ahead, experts anticipate moderate economic growth of 0.6% in 2025 and 1.2% in 2026, with inflation projected to settle at 2.3% in 2025 and 2% in 2026. While economic expectations remain cautious, there is hope that targeted policy measures could support a stronger recovery. The Austrian Retail Association emphasizes the need for regulatory simplification, innovation incentives, and economic relief efforts to secure a sustainable future for the country’s 93,000 retail businesses and 700,000 employees.
At the European level, recent developments suggest a shift in priorities, with the EU Commission’s new work program focusing on competitiveness, resilience, and regulatory efficiency. Planned "fitness checks" to evaluate existing regulations could provide much-needed relief for the retail sector, supporting its ability to navigate ongoing economic uncertainties.