Analysis of Retail in Austria [608201]

Analysis of Retail in Austria

Bucharest Academy of Economic Studies
The faculty of International Business and Economics 2017

STUDENT: [anonimizat]: LECT. UNIV. DR. GAVRIS ALEXANDRU
GROUP: 921

Content

1. Introduction
INDUSTRY AND MARKET ANALYSIS

1.1 PEST Analysis
Political. Austria is a democratic republic country and has a very stable political situation and
favorable for investors, with a low political risk. Currently it is ranked on the six place among 58
industrial countries1. Austria is a landlocked country located in Central Europe, bordering
European countries such as Hungary, Slovakia, Germany, Slovenia, and Italy.
Economical. Economic analysis would consider first some generic data about Austria and will
focus on retail market development. Austria has a well-developed market economy and a country
with high standards of living. Austria, as other country in the continent was affected by the global
financial crises that began in 2008. Through the economic reforms, currency depreciation and a
high inflow of Foreign Direct Investment (FDI) the Austrian economy grew slightly, from 291,93
billion euros in 2008 to 361,18 in 20162. High per capita income is a key component of Austria’s
economy (47754.60 US dollars in 20153). The top performing sector in retail consist in food and
drink being largely responsible for this growth.
Social. The World Competitiveness Yearbook 2009 ranks Austria number one in the quality of
life. Austria has high living standards, rich culture, environmental quality, security and shopping.
For a long time after the World War the main priority for Austrians was in reconstruction and in
supporting the industrial development.
Tehnological. Austrian companies are among the best in the world in technology sectors,
particularly in the fields of environment engineering, automation and communication technology.
Leaders in research and development, they offer goods and services characterized by innovation,
which enjoy strong global demand.

1.2 Retail Market

The retail market in Austria is on a modest upward trend in 2015, seeing a slight increase of 1.4%
in comparison to 2014. This increase was caused mainly by online retail trade, which grew by
7%, up to 200 million euros, in Austria and over-the-counter retail only by around 1.1%. The

1 http://www.marketresearchreports.com/countries/austria

2 https://wko.at/statistik/prognose/outlook.pdf

3 https://tradingeconomics.com/austria/gdp-per-capita

mid-year figures of 2016 affirm this positive trend with a nominal increase of 1.2% achieved. The
market is moderately saturated, fostered by the concentration of power competition intensify. In
the same time, online shops are impacting abroad range of retail related issues in Austria. It is
still room for development in this sector due to internationalization in particular in the East of
Europe. Austrian retail market continues to be significantly contested due the increasing of price
sensitivity of the Austrians, which has a positive effect for the companies in the discount sector.
The other sectors that have a significant increase in their private label product range are the toys
sector and grocery sector, which achieved a notable turnover increase of 3,4% followed by the
groceries with 3,2% compared with previous year. On the opposite side, the electronic goods
sector’s turnover decreased the most with 2,7% followed by the shoe sector with 1,3%.

http://www.regiodata.eu/images/attachments/article/953/Handelskonzentration_in_AT_EN.jpg

Retail is a relatively fragmented industry in Austria, although it has shown a trend towards greater
concentration. In Europe, Austria has among the highest levels of concentration within the
grocery market, in terms of market share. Compared to other countries, the grade of concentration
in the food and in drugstore sector are particularly notable. The reasons for this are twofold: in
the first place, Austria is a small country, so retailers are able to quickly establish internal outlet
networks. On the other hand, the country is located, culturally and geographically close to the
German market, which has helped German companies become market leaders in most retail
sectors in Austria.

1.3 Labour Market

A total of 4.220.300 Austrian people were in employment across 2016, of which 2.234.500 were
male and 1.985.900 female.
Employment
The employment rate for persons aged 15 to 64, i.e. the number of employed persons as a
percentage of all persons in this age group, was at 71,5 % on average in 2016. The part-time
employment rate (share of persons working less than 36 hours a week according to information
provided by them) amounted to 28,9 %. However, 48,1 % of women and only 10,7 % of men in
gainful employment were employed part-time.4
Taxation
Value Added Tax. VAT is generally imposed on the supply of goods and services within Austria
by entrepreneurs within the scope of their business and on imports into Austrian customs territory.
The standard VAT rate is 20%, with a reduction of 10% and 13% applies for hotel and food
sectors. Some transactions such as exports and intra-community sales are zero-rated. Examples
of transactions that are exempt from VAT are the sale of financial assets and insurance premiums .
Exports&Imports
Exports. In 2015 Austria was placed on the 31st of the largest exporter in the world, with an
amount of 141 billion euros exported. During the last five years the exports of Austria have
increased at an annualized rate of 0.7%, from 140 billion euros to 141 billion euros.

4 http://www.migration.gv.at/en/living-and-working-in-austria/austria-at-a-glance/labour-market-facts-and-figures/
https://upload.wikimedia.org/wikipedia/commons/b/be/2010_Austria_Export_tree_map.png

Imports. In 2015 Austria was placed on the 29th of the largest importer in the world, with an
amount of 146 billion euros imported. During the last five years the imports of Austria has
decreased at an annualized rate of 0.2%, from 152 billion euros in 2010 to 146 billion euros in
2015.
Value Year
Machinery, nuclear reactors, boilers $19.71B 2015
Vehicles other than railway, tramway $15.42B 2015
Electrical, electronic equipment $14.31B 2015
Mineral fuels, oils, distillation products $11 .69B 2015
Plastics $6.51B 2015
Pharmaceutical products $5.28B 2015
Organic chemicals $5.11B 2015
Articles of iron or steel $4.13B 2015
Optical, photo, technical, medical apparatus $3.75B 2015
Iron and steel $3.61B 2015
Pearls, precious stones, metals, coins $3.28B 2015
Furniture, lighting signs, prefabricated buildings $3.20B 2015
Aluminum $3.16B 2015
Articles of apparel not knit or crocheted $2.66B 2015
Articles of apparel, knit or crocheted $2.64B 2015
Wood and articles of wood, wood charcoal $2.47B 2015
Paper and paperboard, articles of pulp, paper and board $2.10B 2015
Footwear, gaiters and the like, parts thereof $1 .60B 2015
Miscellaneous chemical products $1 .59B 2015
Copper $1 .52B 2015
Rubbers $1 .44B 2015
https://tradingeconomics.com/austria/imports -by-category

1.4 General Overview of Retail Market

A few items that cover the general overview are the number of trade organizations,
their size, the development of turnover, and the expansion of shopping centers,
among other things.