Hungarian retailers expected to downsize in February

January 14, 2015


György Vámos, National Trade Association general secretary, told online business daily on Monday that retailers would lay off workers in February in anticipation of new laws coming into force on March 15.  Vámos believes that the laws will result in 15,000-20,000 job losses in retailing.

The law prohibiting shops from holding Sunday hours authorizes the government to make exceptions depending on the specific conditions of a given settlement.  “We are concerned that from this the usual exceptions will be made but that it may run afoul of EU regulations,” said Vámos. He added that, while the EU is silent on the issue of Sunday operating hours, it does prohibit governments from making unwarranted distinctions between companies.

Vámos believes that recent changes to the grocery chain oversight fee, which is effectively a progressive tax on turnover, is discriminative in that it will mostly be paid by foreign-owned chains such as  Aldi, Auchan, Lidl, Metro, Penny Market, Spar and Tesco.

He believes that, contrary to the Ministry of National Economy’s interpretation of the law prohibiting shops from holding operating hours on Sundays or at night, as presently worded the law does not prohibit web-based grocery stores from making deliveries on Sundays.  Vámos says the law’s prohibition of Sunday working hours only applies to shops.  He points out that web-based stores do not have operating hours, and the law does not prohibit companies from making Sunday deliveries.

According to Spar Hungary company director Gabriella Heiszler, Spar’s decision to decrease planned investment in Hungary from EUR 59 million to EUR 25 million in 2015 is a direct result of having to pay an oversight fee of HUF 9 billion this year instead of HUF 325 million.  This, in turn, would result in her company creating 600 fewer jobs in 2015 than planned.

Noémi Csaposs, the president of the Hungarian Association of Personnel Advisors (SZTMSZ), believes the expected downsizing will affect more women than men depending on the local labor market, and advises those discharged to give serious consideration to changing professions.  She does not believe the layoffs will result in significant numbers of people moving to Budapest in search of employment, due to the huge difference in the cost of housing.