Retail Market Report Austria | 2023/24

The Retail Market in Austria

Loss of purchasing power and insol- vencies characterise a difficult year

The sharp rise in insolvencies is, first and foremost, an aftereffect from the expiration of COVID-19 sup- port measures, but also reflects a structural prob- lem: Rising inflation has eroded Austrian consumers’ real purchasing power, and the substantial increase in energy prices is driving retailers’ operating costs upward.

The Austrian retail sector was the source of all sorts of headlines in 2022 and especially in the first half of 2023 – unfortunately, with less favourable events like insolvencies and announcements of market exits. Examples included the sensational bankruptcy of the kika/Leiner empire and the Forstinger automotive chain as well as the insolven- cy of Delka/Salamander and their 37 branches in the generally very difficult textile segment. With a total of 473 bankruptcies, the retail trade ranked first in KSV1870 insolvency statistics for the first half of this year.

“Weaker properties are being withdrawn from the market, and this adds to the steady decline in selling space.“

The second half of this year has, conversely, brought signs that the retail trade has passed the most difficult phases – at least for the time-being: Energy prices are falling (in particular, the key wholesale price for gas is now substantially lower than at the beginning of the Ukraine conflict), inflation is declining, tourism has just closed the summer season with strong results, and private consumption has stayed robust in spite of rising prices. Positive developments are also visible on the rental side: There is a rising demand for space by discounters, and food retailers remain on an expansion course despite weaker growth. The

“Retail insolvencies have not had a serious impact on the supply of space or vacancies up to now.“

Together with several companies that have announ- ced their intent to leave Austria, these developments have triggered a certain commotion on the market for retail space. kika/Leiner alone had roughly 300,000 sqm of rented space. One very positive factor was that practically all of this space was taken over by a successor company or redirected to an alternative use.