– Sales almost at PreCorona level!
– Online trade for the first time in the minus!
– Highstreet frequencies in Vienna increased by 8-10%!
– Luxury segment booming!

Sales Austria 2022
Stationary retail sales for the full year 2022 show a very positive development. Compared to 2021, sales increased by a nominal +8.1% to € 72.5 billion (gross incl. VAT). Adjusted for inflation, this results in a slight decline of 0.8%. However, the pre-Corona level has not yet been reached.
Adjusted for inflation, food retailing suffered a drop in sales of minus 3.2% in 2022 – the minus is certainly also due to the fact that food retailing achieved very good sales during the Corona period. Non-food retail was able to generate a slight increase of +1.3% in real terms.
If we look at the sales trend in detail by sector, it is fashion retail that stands out with a plus of 17.8% year-on-year; here, too, the pre-Corona level was not reached, but the direction is right.

Historic minus for online retail
Online retail is losing for the first time in years, with sales down 7.8% in real terms and 3.2% in nominal terms, people were looking forward to going shopping again after COVID. How long this effect will last, however, remains to be seen.

Outlook for the future
The prognosis on future developments is becoming increasingly difficult due to unforeseen events, as both extreme swings upward (e.g. end of the war) or downward (e.g. intensification of the conflict) are hardly assessable.

Based on the current state of knowledge, it can be assumed that sales will stabilize at last year’s level. We may quote from the McKinsey report “The state of Fashion 2023”, which assumes that there will generally be a slight minus to a slight plus in the fashion trade in Europe (-4% to +1%). The luxury segment, on the other hand, is expected to record a plus of 3% to 8%, i.e. customers with the financial means will continue to spend or even spend more money on luxury goods, as they are hardly or not at all affected by the crisis.

So what does this mean for the retail submarket in the real estate sector? The demand for new space is stable, especially from the luxury segment, but there is also demand from new interesting brands, the rents in the luxury segment will remain the same or increase slightly; a slight market adjustment slightly downwards is to be assumed, as energy costs and thus inflation reduce the possible profit.

 

Vienna
Vienna has a special position not only within Austria but also in Europe, as it is a comparatively large capital city in relation to the number of inhabitants. Vienna also has no need to shy away from comparison in terms of tourism volume, where almost the pre-Corona level has been reached. It is therefore no wonder that the frequencies in the important high streets have increased by approx. 8-10% compared to pre-Corona.

Vienna submarkets in detail
Vienna Inner City
No stone is left unturned – this is the best way to describe the luxury segment in Vienna’s inner city. Especially the luxury segment did very well in Vienna, which is also the reason that new brands will open stores as well as expand and relocate their existing stores.

Another positive aspect is that new submarkets have been opened up and/or improved through the completion of pedestrian zones. Here are especially the “Bauernmarkt” and the “Neuer Markt” to mention, these examples show us that the city still has sufficient development potential.

Rents:
Kärntner Straße: € 150 – 400,–/m2
Graben: € 200 – 450,–/m2
Kohlmarkt: € 400 – 600,–/m2
GQ: € 200 – 300,–/m2
Herrengasse: € 80 – 150,–/m2
Seilergasse: € 100 – 190,–/m2

Mariahilfer Straße
The Mariahilfer Straße is in a phase of upheaval due to the construction of the subway as well as the new construction of the KADEWE, especially the lower part suffers a lot from the construction sites at the moment, nevertheless the rest of the Mariahilfer Straße is developing positively.

Rents:
Mariahilfer Strasse: € 40 – 150,–/m2
Secondary locations Mariahilfer Straße: € 30 – 70,–/m2

Favoritenstraße
Favoritenstrasse is the most important shopping street in Vienna’s most populous district. It has basically developed positively in terms of frequency, and there are also numerous new projects in the process of completion. However, due to the low expansion activity of international chains, Favoritenstraße is currently hardly in their focus.

Rents Favoritenstraße: € 25 – 75,–/m2

Shopping streets federal states
Graz, Austria’s second largest city, has the highest shopping center density, which has put considerable pressure on the city center. As a result, there have been hardly any notable lettings.

In Linz, the Landstrasse continues to develop sideways. The Taubenmarkt arcade is being completely renovated, which should have a sustained positive impact on the Landstrasse location. It can therefore be assumed that sales will remain stable until then.

Due to the strong tourism as well as the low supply of space, rents in Salzburg remain relatively stable.

Rents:
Graz: € 60 – 75,–/m2
Linz: € 60 – 90,–/m2
Salzburg: € 60 – 150,–/m2

Stefan Goigitzer:
“I expect another exciting year, especially in Vienna! The demand for new space is there and due to Vienna’s special position in terms of purchasing power and tourism volume in relation to the rest of Austria, we can expect an increase in turnover in this submarket.”

Sources:
WKO
Handelsverband
Statistik Austria
McKinsey