Filenews 1 February 2025 - by Theano Thiopoulou
Prices are the ones that matter most to consumers when they go shopping in the supermarket, and supermarket operators have reacted by expanding their range of private labels, at the expense of premium brands in the products offered.
This is one of the interesting findings in the retail sector, from recent contacts between ECB staff and representatives of 82 leading companies operating in the euro area, which took place between 6 and 14 January 2025.
In addition to the reduced food prices that consumers are looking for in retail, there is the same trend in clothing, through increasing competition from Chinese online retailers. In this context, clothing retailers reported significant disruption in mid-price products, in contrast to the increase in demand for luxury brands.
In the services sector, travel is recording continued strong growth, driven by the extended 2024 summer season, the positive winter season so far, and very strong growth in early bookings for the 2025 summer season.
Demand for leisure travel continues to grow rapidly, despite rising prices, but with consumers, according to the survey findings, trying to save money on eating at restaurants. Contacts in the telecommunications services industry also reported steady growth in consumer demand. In addition, business service providers reported rapidly increasing demand for artificial intelligence and cybersecurity, which also stimulates demand for related advisory services.
In manufacturing, businessmen said they were more concerned about cheap imports from China than tariffs from the US. Only half of the manufacturing firms contacted by the ECB believe that their activities in the euro area will be affected by US tariffs. The main concern reported by businessmen concerned the indirect impact of most imports into the European Union from China.
The quarterly phone survey also showed that manufacturing firms are laying off staff or hiring fewer as they try to cut costs. In contrast to manufacturing, there were slightly more positive reports from the construction and real estate sectors. The outlook for employment remained weak, given the focus of many firms on efficiency and productivity growth.
