Investing is in

For a long time the retail sector was the factor providing the Austrian economy with stability. Now this sector, too, is slowly beginning to feel the effects of the crisis. Figures from KMU-Forschung show that sales went down by 0.1 per cent in the first five months of 2011. Consumers appear to be slightly at a loss and are hanging onto their money. Many sectors complain about the slowdown – and the DIY retailers are going against the negative trend, achieving an increase of 2.8 per cent. As a result of the crisis consumers are preferring to invest their money in long-term acquisitions rather than in short-lived goods. Consequently home renovation and modernisation are popular, helped by diverse state subsidies that encourage this trend. A survey by Spectra at the beginning of 2011 revealed that one in two home owners in Austria is planning to renovate their property. The decisive factor: saving energy. Altogether the prospects for retailing are not at all bad. However, a certain unresolved problem threatens from the internet. While the static trade is only seeing slight expansion, online trade is experiencing rapid growth. According to Regio-Data, the latter’s sales total for 2010 was € 7 bn – which is a 14 per cent increase on the previous year. Some sectors are coming under pressure as a result of this situation. They include the DIY stores, since they are getting new competition from suppliers such as Amazon. Obi was the first to react with the opening of an online shop in the middle of the year. So far no other DIY retailer has followed suit. The Austria report from the GfK/EDRA shows significant changes in the product ranges in 2010 compared with the previous year: plumbing/heating +5.4 per cent, wallpaper/floor coverings/interior decoration +4.9 per cent, tiling +3.4 per cent, building materials and chemicals +2.4 per cent and leisure/hobby/DIY -3.2 per cent (all figures unadjusted). The boom in garden design is petering out, according to Kreutzer & Fischer’s “Branchenradar”. Although sales in 2010 grew by 1.45 per cent year-on-year, it is now believed that 70 per cent of this growth can be put down to price increases and only 30 per cent to demand. The product categories of tools, pond technology, irrigation and surface stabilization are stagnating. By contrast, the product category of plants saw growth of 2.3 per cent. The EDRA Report 2010 reveals that live plants in the DIY and home improvement stores even notched up growth of 4.8 per cent…