Switzerland’s retail sector failed to profit from a weaker franc and improving economy last year and business remains sluggish, according to a Credit Suisse report.
Retail sales increased by 0.1% in 2017 after two years’ decline, Credit Suisse noted in its annual industry surveyexternal link published on Tuesday.
Retailers were expecting better figures in view of the improving economy, said Credit Suisse’s retail specialist Sara Carnazzi Weber. This is partly down to residents’ stagnating purchasing power and fewer immigrants – and therefore consumers – in Switzerland.
The steady weakening of the franc against the euro was generally good news for Swiss retailers, however.
“Cross-border shopping has dwindled, but the decline has not been huge. The amount of money spent abroad remains high and hurts border areas,” she acknowledged.
Competition remains tough online. The German group Zalando is now the number one e-commerce company in Switzerland, generating CHF624 million ($635 million) in sales in 2017, followed by Digitec Galaxus, which is controlled by the Swiss supermarket giant Migros.
Overall, the situation for retailers is unlikely to improve drastically in 2018. Credit Suisse believes retail sales growth will remain sluggish, forecasting growth of 0.3%, compared to a 1.7% increase in gross domestic product (GDP).