Bank Swiss retail trade likely to grow only slightly in 2025
Retail trade in Switzerland is likely to grow only modestly in 2025 and thus at a similar rate to the previous year. The sharp rise in health insurance premiums is likely to reduce consumers' purchasing power.
08.01.2025, 11:00
08.01.2025, 11:01
SDA
The outlook for the Swiss retail sector in the current year is "cautiously optimistic", according to the "Retail Outlook 2025" published by UBS on Wednesday. This is because real wages are likely to rise for the second year in a row, according to the bank's forecasts.
Health insurance premiums put the brakes on
However, a significant acceleration in demand in the retail sector is not expected due to the continued above-average increase in health insurance premiums.
Specifically, the bank is forecasting growth in total retail sales of 0.6% in real terms in 2025 and nominal growth of 1.1% due to higher prices.
According to the study, demand in the food/near-food segment is likely to be driven primarily by population growth. However, real sales growth in the non-food segment is also expected to be similar to 2024. Overall, the UBS economists expect solid growth in consumption, although this is likely to be slightly below average in a long-term comparison.
The "Retail Outlook 2025" pays particular attention to shopping tourism. The EUR/CHF currency pair is likely to fluctuate around CHF 0.94 over the next twelve months, which would be equivalent to a slight appreciation of the franc compared to the previous year. Overall, shopping tourism is therefore likely to remain attractive.
Impact of the lowered exemption limit for foreign purchases still open
However, the new exemption limit for foreign purchases, which has been reduced from CHF 300 to CHF 150 as of January 2025, could have an impact. This could reduce the appeal of purchases abroad. According to UBS, it will only become clear over the course of the year whether this new regulation on shopping tourism will actually have a positive impact on the Swiss retail trade.
In terms of the labor market, the bank sees neither tailwinds nor headwinds for consumption. In contrast to the previous year, this is no longer a driver. However, because some segments were negatively impacted by weather-related special effects in 2024 - the study mentions the Do it Yourself/garden/car accessories segment - there is still room for growth.
According to the forecasts, online retail will continue to grow in importance, meaning that more sales are likely to flow abroad.
According to UBS estimates, the domestic retail sector will stagnate in nominal terms in 2024. However, if falling prices are taken into account (-0.5%), this results in real growth of 0.5%. According to the study, this points to demand growth supported by higher wages and lower inflation.
