Trade is in crisis. According to experts, the scope for this year’s negotiations is limited.
As a rule, metal workers are the focus of the autumn wage round. This year, however, all eyes are on retail. Because the metallers already agreed to a deal for 2024 last year. The formula: rolling inflation plus one percent. This means metalheads have up to 4.8 percent more income. On Wednesday, the employer and employee representatives for trade will sit down at their negotiating table for the first time.
The union had a tough exchange of blows with the Chamber of Commerce (WKO) last year. There was a strike in the middle of the Christmas season and an agreement was only reached afterwards. The new chief trade negotiator, Veronika Arnost, wants to take a calmer approach this year.
“From the current perspective, strikes are out of the question,” she said in a conversation with journalists. In any case, the employees want a deal above rolling inflation, which is 3.8 percent. One-off payments and Sunday opening remain a red flag.
The union is more open to agreements that could provide more free time for employees. When asked about the high number of bankruptcies and the difficult situation in retail, Arnost said that higher wages would secure the purchasing power of employees, which would lead to more consumption in retail. The WKO has already replied that this was not the case even after the high wage agreements of the previous year.
Sluggish consumption poses a puzzle for economists
This is also a puzzle for economic researchers. Wifo economist Marcus Scheiblecker is surprised that consumption has not picked up despite the high real wage growth of 4.5 percent net per capita for 2024. Instead, people save. The savings rate is noticeably high. It even rose to over ten percent in the country in the first quarter of 2024.
If you look at the Wifo consumer survey, you can see that people are currently increasingly afraid of losing their jobs. In times when this fear existed in the past, consumption was higher, Scheiblecker tells the “Presse”. Of course, Wifo does not make a recommendation for the negotiations, but the scope is limited.
PW
Retail sales are declining
In terms of sales, the entire Austrian retail sector recorded a nominal decline in sales of 1.4 percent in the first half of the year compared to the same period last year. Due to inflation, the minus is even greater in real terms. The furniture trade had to cope with the biggest losses at minus 12.7 percent, followed by books and magazines as well as shoes. Only the clothing and food sectors increased in the first half of the year.
Bankruptcies are increasing
According to the credit protection association KSV1870, there were 838 bankruptcies in retail by the third quarter of this year. That is 13 percent more than at the same time last year. At that time there were 737 bankruptcies. Well-known brands such as the fashion chains Esprit and Scotch & Soda and the decorative chain Depot also slipped into insolvency. “We now have four bankruptcies every day and almost every fifth municipality is without a local supplier,” says trade association managing director Rainer Will.
The KV negotiations for the railway workers also begin on Wednesday. On Tuesday, representatives of the social economy met for the first time for negotiations.
