Hungarian retail sector faces stagnation despite turnover growth

An analysis by MBH Bank reveals underlying challenges in the Hungarian retail sector despite a reported 4.5 percent increase in turnover during the first half of the year. The growth was significantly driven by fuel consumption, whereas excluding fuel, growth was only 3.8 percent, indicating a state of stagnation.

Key concerns include a decline in the volume of food specialty stores, potentially linked to the indirect effects of price cap measures. The sector is also experiencing increased concentration and store closures.

Labor market trends are particularly notable, with a sharp decrease in the number of employees due to accelerating closures. There is a significant demographic shift, as the proportion of workers under 24 has dropped, while one in five employees is currently retired or will reach retirement age within ten years. Furthermore, the sector's share of gross value added has fallen to 9.9 percent, and retail investment value has been declining since early 2024.