Austria's retail sector recorded modest revenue growth in 2024, despite continuing economic difficulties and low consumer confidence.

The latest WIFO & HV Economic Report, commissioned by the Austrian Retail Association, indicates a nominal sales increase of 2.7% (real growth of 0.9%), exactly matching last year's projections.

This progress comes even though Austria lags behind Germany in consumer confidence measures, amid a generally cautious spending atmosphere.

The report reveals that total net retail sales, excluding motor vehicles and fuel stations, amounted to €77.2 billion in 2024.

December's holiday sales were especially robust, with a 4.6% revenue increase compared to the previous year, following strong growth in November.

However, consumer sentiment continues to be fragile. While declining inflation has somewhat improved consumer confidence, rising unemployment has limited spending.

Furthermore, the labour market continues to face pressure, with a notable decrease in job vacancies within the retail sector. In December, the number of unfilled positions fell by almost 25%, though approximately 9,300 retail jobs remain vacant across Austria.

At the same time, Austria's savings rate is projected to increase to 12%, indicating cautious consumer behaviour in response to ongoing economic uncertainty.

In addition, inflation continues to be a major factor affecting consumer spending. Although inflation fell to 2.0% in December, it rose to 3.3% in January 2025, driven by higher energy prices as government subsidies ended, along with rising costs in hospitality and services.

Yet, inflationary pressure on industrial goods and food has eased, allowing the retail sector to serve as a stabilising influence, Vienna International News reports.

Moreover, consumer confidence in Austria has declined, with the EU's harmonised consumer sentiment indicator falling to -19.2 points in January. Although Germany has also seen a drop, its consumer sentiment is still comparatively higher at -11.9 points.

Looking forward, experts forecast modest economic growth of 0.6% in 2025 and 1.2% in 2026, with inflation expected to stabilise at 2.3% in 2025 and 2% in 2026.

While economic expectations remain cautious, there is optimism that targeted policy measures could help drive a stronger recovery.

The Austrian Retail Association has stressed the importance of regulatory simplification, innovation incentives, and economic relief efforts to ensure a sustainable future for the country’s 93,000 retail businesses and 700,000 employees.