South Tyrolean retail structure and challenges
This study examines the structural characteristics and the development of South Tyrolean retail trade with a fixed location. It covers specialised retail trade (e.g. textile shops), nonspecialised retail trade (e.g. supermarkets and department stores) as well as petrol stations. The changes introduced by the trade reform of 2000 (e.g. the classification of goods and establishments by size classes) made it necessary to completely revise the information bases. In addition, the supply level at municipal and district level is examined and compared with that of neighbouring regions. Another novelty is a price comparison between South Tyrol and Trentino. The problems of the sector are analysed and finally some perspectives with challenges are presented. The study is essentially based on data from the commercial register and a self-assessment (revision) carried out on all retailers in 2001. The administrative data of the companies were updated and at the same time important structural information was collected. In addition, the following data sources were evaluated: The permanent establishments count (ISTAT), the employees archive (Office for Sociodemographic Informatics), the balance sheet data (CERVED and SEAC), the European comparative data (EUROSTAT) and the archive of the Informatics Association of the Italian Chambers of Commerce (lnfoCamere), as well as the VAT data (Ministry of Finance). Points of sale, employees, sales area of the South Tyrolean retail trade: With a total of 6,777 points of sale (as of August 2002), the retail trade is one of the most important sectors of the South
Tyrolean economy. Of these, 4,564 companies are involved in retail trade as their main activity, employing 17,736 people, corresponding to an average company size of 3.9 employees. The average sales area is 99 m2. A total sales area of 673,000 m 2 is available to consumers. The non-food stores predominate (with 75% of the points of sale and 78% of the sales area). While there are a large number of specialised retail stores (82% of the points of sale), the non specialised stores (mini and supermarkets, department stores ...) account for only 12% of the points of sale, but account for 21% of the sales area. Supply still intact: With 12 businesses per 1,000 inhabitants (shops with main retail activity), the supply rate is similar to that in neighbouring Trentino (13) and the national average (14). However, it is much better than in the German-speaking neighbouring regions (Austria 6.5 and Germany 4.4). In an international comparison of local supply based on the number of employees, the picture is relativized, especially since the number of retail employees per 1,000 inhabitants is very similar everywhere (South Tyrol: 37, Austria: 35, Germany: 31). The major distribution has the same importance in South Tyrol (with 1.4 enterprises per 10,000 inhabitants) as at the national level, but the density is still significantly lower than in the neighbouring provinces. The supply of foodstuffs is still guaranteed in all municipalities of South Tyrol. Stable development of points of sale: The non-food sector managed to grow somewhat in recent years; the strongest growth
was registered in the "furniture" and "clothing" stores. The food sector as a whole has stabilized, but there has been a significant shift. The significant decline in specialised grocery stores (-25%) was offset by a huge increase in mini-markets (+48%). The minimarkets are partly new, and, in some cases, specialized grocery stores have simply expanded their product range and are now considered mini-markets. Economic performance: In the year 2000, the South Tyrolean retail trade generated a turnover of 3,059 million euros or a value added of 530 million euros. The retail sector thus accounts for 5.2% of South Tyrol's GDP and 7.0% of the workforce. With a turnover of 172,500 euros per employee and a value added per employee (productivity) of 30,000 euros, South Tyrol is above the corresponding values for Italy and most EU countries. More than half of the turnover (52%) is generated through customers of the own municipality. The share of turnover generated by tourists amounts to 23% and even reaches between 60% and 80% in the top tourist municipalities. Problems: The main problem of the South Tyrolean retail trade is the competition (mentioned by 21% of the points of sale). It is above all the smaller points of sale that complain about the too strong (price) pressure on the part of the major distributors. In the larger companies, the main problem is the lack of qualified employees. In addition, the high costs mean that a quarter of South Tyrolean retailers are unable to achieve satisfactory earnings even if their turnover is above average. Price comparison South Tyrol - Trentino: The end consumer spends an average of 7% more on his purchases of everyday products (food and household goods) in South Tyrol than in neighbouring Trentino. The higher expenditures of the South Tyroleans are relativized by an average income that is 14 % higher. Conclusions The main objective is to maintain the competitiveness of the South Tyrolean retail trade and to maintain the intact local supply nationwide in the long term. This applies above all to everyday goods. In addition, productivity must be consistently increased: •
Therefore, it is primarily the retail businesses themselves that are challenged: Above all, the many small shops must try to cope with the big competition. This can only be achieved by paying special attention to the needs of customers: They want more and more service, advice and experience when shopping. Especially the smaller
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shops can react very flexibly. This requires a rethink: going from the passive role of the victim, i.e. through competition from major distributors, towards an active role in which customers are bound by ideas, special service, quality and individual treatment. For example, the older customers, whose number is increasing more and more, need a lot of advice, a special arrangement of goods, a lot of light, non-slip floors... Economic policy is also needed, which must try to maintain a balance between the consistently small retail shops and the major distributors. Both are needed, but the right mix is what matters. One of the tasks of economic policy is also to support education and training for the trade accordingly. Finally, the consumer is also required to bear the responsibility for what South Tyrol's retail landscape will look like tomorrow. A lot of sensitization work is required so that the consumer understands that, to compensate the costs (travel, time, environment, risk ...) he has for the journey to the supermarket in the next larger municipality, he would have to make very large purchases. The challenge is therefore to maintain the good supply situation and at the same time to further develop productivity. This is no easy task, even if the increasing income level and the changing age structure of the population provide opportunities for quality and service strategies for small retail companies in the periphery. Which individual strategy is actually successful, depends on many local and operational factors.