MILAN (ITALPRESS) – If consumption in December closed at +1.3 percent in value realigning with the weak trend of 2024 stopped at +0.7 percent, forecasts for 2025 do not signal a change of pace at the moment. On the contrary, volume growth is estimated at a perfect +0.0%. Value growth is also down with a weighted average of +1.7 percent against an inflation rate of +1.5 percent (Bank of Italy data), thus +0.2 percent. The sharp slowdown in the last 3 months of 2024, from 34.7% in October 2024 to 24.7% in January 2025, has affected the current year’s forecasts with a real risk that a period of stagnation could open. This is according to data from the semi-annual Confimprese-Jakala Retail Barometer with Global Strategy’s elaboration of consumption trends for 2025. The estimates show a weighted average of +1.7 percent, which breaks down into macro sectors. Only other retail (home-furnishings, optics, entertainment, personal care, and services) hints at brighter expectations at +3.1 percent, while apparel at +0.5 percent and restaurants at +0.4 percent are revised downward to 2024. Taking a broader look, overall Italy’s cycle does not differ from the average evolution of European economies, where contractions in Germany and France have weighed on the Eurozone economy. Moreover, should the duties announced by the United States materialize, they will undoubtedly have a negative impact on the industrial sector and consumer prices and destabilize the international system. In summary, we should expect another complex year for retail companies, with particular attention to the restaurant industry impacted by the increase in food raw materials and the rise in labor costs, a phenomenon that is generalized to all business sectors. It will be crucial for companies to implement shrewd convenience policies to retain their customers and attract new ones, all combined with careful cost containment and productivity improvement policies. “The retail and restaurant chains represented in the Confimprese-Jakala Consumption Observatory,” explains Mario Maiocchi, director of Confimprese study center, “close the year 2024 with a +2.8 percent at total perimeter compared to a total market indicated at a perfect 0.0 percent with a clear sign of stagnation at the country level. What is even more worrying is the sharp slowdown of the economy in the last quarter of 2024 that led to the downward revision of the official 2025 forecasts for Exports, Imports and Employment, all of which were lowered in December by more than half a percentage point from what was estimated only a couple of months earlier. It is therefore difficult to imagine how a scenario of reduced imports/exports and employment would not further impact consumption now forecast by Bank of Italy at +1.0 percent and unchanged from the estimate made earlier.”
Faced with a scenario that does not promise significant growth by 2025, a change in strategy isnecessary to attract the end consumer at the point of sale. Among the first items is the readjustment of price lists, which companies say they want to keep stable with a weighted average of +1.2 percent practically in line with the current inflation rate. Not surprisingly, 79 of the companies do not plan to increase the frequency of the promotional push at a time when just under half of consumers, or 40.9 percent, say they turn to low-price signs. While it is true that the most successful initiatives are promotions, Black friday and sales, they are nevertheless not enough to lift consumer trends and increase sales. The sector on which the biggest rises of +1.8% will occur is other retail. Smaller averages for catering +1.1%, while apparel, which closed 2024 with a modest growth of +1.0%, is expected to have its list adjusted downward to -0.1%.
On promotional leverage, on the other hand, the companies’ intent is to reduce aggressive 2024 policies; they will, therefore, look more at marginality and less at turnover.
As for sales channels, shopping centers ended 2024 with the same trends as the total consumer market. The sentiment is that for 2025, consumer interest in the channel may continue to remain unchanged. Compared to 2023, there was a +2.2 percent increase in visits to shopping centers nationwide in the last quarter of 2024 compared to the same period in 2023, with a significant increase in category A shopping centers.
“The recovery, albeit slight, of traffic in the different shopping environments, both malls and historical centers,” clarifies Raffaele Cerchiaro, managing director JAKALA (pictured), “represents a positive signal to leverage in a context still governed by great uncertainty and growth not linked to volumes but only to the price effect. It becomes crucial for companies on the one hand to convert this traffic into purchases through investments in branding and communication to the end consumer and on the other to increase customer loyalty with service models that aim for excellence. In this context, the role of sales staff, preparation, hard skills and soft skills in the sales ceremony, will become increasingly important in sustaining competitive advantage.”
– Jakala press office photo –
(ITALPRESS).
