Five years after the floor rate was abandoned, the retail trade has still not recovered. Since 2015, turnover has stagnated and for certain categories of goods, like clothing and shoes, sharp declines have been experienced each year. The industry, faced with buying tourism and structural changes, has lost thousands of jobs.
“Since 2015, employment has declined steadily in the retail industry,” said Tiziana Hunziker, economist at Credit Suisse. “Since 2008, 18,000 work places have been lost, which corresponds to a decrease of 7%”.
Difficulties of the branch
The abandonment of the floor rate does not, however, by itself explain the difficulties of the industry. “The Swiss retail trade is influenced by various factors, the franc-euro exchange rate being only one among others”, puts Dagmar Jenni, director of the umbrella organization Swiss Retail into perspective. “For the development of the retail trade in Switzerland, it would therefore be imprecise and reductive to retain only the minimum exchange rate”, she affirms.
However, it recognizes that the higher franc that followed the abandonment of the floor rate in 2015 had a “considerable impact”. “Combined with the challenges posed by structural changes in the retail trade (digitization, investment pressure, costs 50% higher than in neighboring countries …) this effect explains that the retail market has not recovered as much vigorously as we hoped, “she said.
Buying tourism too tempting
Last year, the attractiveness of shopping tourism increased, according to Credit Suisse’s recent Retail Outlook 2020 study. “The Swiss franc strengthened against the euro in 2019. In addition, the price of an average basket of goods increased more strongly in Switzerland last year than in neighboring countries,” says Tiziana Hunziker.
The same average basket of goods cost 40% more in Switzerland compared to France in 2019. In 2014, the price difference was 25%.
To support retail, it is essential that retailers “be able to compete on a level playing field with foreign competition,” says Jenni. “Another shocking reality is the unequal tax treatment between domestic consumption and foreign consumption,” she said, purchases abroad worth less than 300 francs being exempt from VAT. (Ps / nxp)
Created: 15.01.2020, 08h52
–
