- Statistics demonstrate consumers are spending less and saving more. However, the latest data is from December, and it will be key to see if this becomes a trend or just a fluctuation.
- According to traders, it is too early to say, with many agreeing that people are still shopping for deals.
- Some have already had to make layoffs and close stores.
“We’ve only experienced a December decline twice in the history of our business – before 2008 and now,” says Lenka Janeková, owner of Lara Bags. She can compare, having founded the handbag and luggage company with her husband 25 years ago in Banská Bystrica.
This time, she says, the pre-holiday situation was even worse than in 2008. “Back then, labor costs weren’t as high. Currently, costs are high for wages, energy, and rent increases annually with inflation. It’s increased by 30 percent since Covid,” Janeková describes.
Her company’s revenues fell by 3.6 percent year-on-year in December. And that applies to brick-and-mortar stores. Online sales
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European retailers are facing a challenging consumer environment as spending slows and costs rise, according to recent reports. Lara Bags, a Slovakian retailer, experienced a 3.6% year-over-year decline in brick-and-mortar sales in December, signaling potential headwinds for the sector.
Lenka Janeková, owner of the 25-year-classic company Lara Bags, stated, “We’ve only experienced a December decline twice in the history of our business – before 2008 and now.” The company, originally founded in Banská Bystrica, is now navigating a landscape of increased operational expenses.
Janeková highlighted the significant cost pressures impacting her business, noting that conditions were even more difficult leading up to the holidays this year compared to the 2008 financial crisis. “Back then, labor costs weren’t as high. Currently, costs are high for wages, energy, and rent increases annually with inflation. It’s increased by 30 percent since Covid,” she explained.
While the December sales figures are concerning, traders remain cautious about interpreting the data as a definitive trend. Many believe consumers are still actively seeking out discounts and promotions. However, the slowdown is already prompting some businesses to take drastic measures.
The situation underscores the broader economic uncertainty facing businesses as they navigate rising costs and shifting consumer behavior. The coming months will be critical in determining whether the December slowdown represents a temporary blip or the beginning of a more sustained period of reduced consumer spending.
