Outlook continues to improve for retailers

The difference in food prices between Switzerland and neighbouring countries has dropped over the past two years Keystone

The Swiss retail sector can expect sales to increase by 1.5% in 2014 according to an annual report published by the Credit Suisse bank on Wednesday, improving on the previous year’s results, which grew by an estimated 0.5%.

This content was published on January 8, 2014 - 12:42 and agencies

Among the 218 decision leaders in the sector and its suppliers questioned for the report, nearly three in four said they expected higher sales, while more than half are counting on higher earnings. The difference is due to the fact that few believe that pressure on margins will let up.

The number of retailers expecting to expand their surfaces has increased, but the same can be said of those planning to downsize. According to the study, retailers will be focusing on optimising their existing space.

The improved economic outlook in Switzerland and abroad should also encourage consumers to spend more at home.

The study’s authors said the improvement would be helped by the fact that cross-border shopping was expected to stagnate and have less impact on domestic sales. Boosted by a strong franc, the Swiss spent last year an estimated CHF4.5 billion ($5 billion) in neighbouring countries, a figure that excludes online and holiday shopping.

Decreasing prices have also had an impact according to the report. Over the past two years, the difference in food prices between Switzerland and neighbouring countries has fallen from 46% to 37%.

In the non-food sector, Swiss retailers have become more competitive, with prices for consumer electronics and furnishings at comparable levels to those over the border. More flexible opening hours have also helped boost the bottom line in some cases, although the report’s authors say the long-term effects of such changes are not a game changer.

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