Wage cuts to counter rising energy and material costs

Small and micro retailers across Europe are responding to the difficult business environment with energy-saving measures, reductions in margins, price increases and cuts in their own wages. Even though many fear a drop in sales for the Christmas season, 83% in Switzerland rule out temporary or permanent store closures. This is because for more than a third of the SumUp retailers surveyed, rising energy prices and material costs are having the greatest negative impact on business performance. In Switzerland, energy costs (39 percent) are causing retailers slightly more headaches than rising material costs (30 percent). Added to this is the change in customer shopping behavior: 36% of retailers feel that customers in Switzerland are shopping less often and spending less in the process. These developments are also observed in the UK, France, Italy and Germany.

Swiss traders most positive

Christmas is the peak sales period for many companies. In Switzerland, retailers are rather confident about the seasonal business: one in six retailers (12%) expect more sales than in 2021. Among our neighbors and in the UK, these figures are significantly lower at 5 to 9 percent. In addition, around half of the small and micro retailers in these countries expect sales to decline. A third of the Swiss SumUp retailers do not feel any increase in stress levels - the situation in Italy, on the other hand, is quite different: there, 80% of the survey participants perceived the current situation as stressful. To reduce stress, European retailers rely heavily on yoga or meditation (approx. 20%) and spend more time with family and friends (approx. 20%). Professional support in the form of psychological help is sought most frequently by the British (9.5%) and least frequently by the Germans (2.8%). Switzerland is in line with the European average with 7%.

How retailers in Switzerland and Europe are dealing with the challenges

In Switzerland, 47 percent of respondents want to continue reducing energy consumption. The situation is similar in Germany (47%) and also in Italy (39%), while in the UK (31%) and France (29%) energy saving is less of a focus. Across Europe, Swiss companies are most likely to cut costs in their own wages as well: 28% cite this as a savings option. This willingness is also strong in France (24%) and the UK (26%), but somewhat lower in Germany (18%) and Italy (15%). In addition, just under a third of all retailers across Europe feel compelled to reduce their margins - in Switzerland, the figure is clearly lower at 21%. However, small and micro retailers in Europe will also have to pass on prices to their customers: on average, two-fifths of those surveyed plan to increase prices, and in Germany even more than half (52%).

Source: Sumup