Lemut, head of retail company Fama, said that consumers are mainly holding back purchases of expensive goods, such as high-quality wine or champagne and big pieces of prosciutto, while cheaper gifts sell better.
LJUBLJANA, Dec. 21 (Xinhua) -- Although a huge range of glittering festive lights adorns the cities and villages across Slovenia, giving the impression that life has returned to normal after a turbulent two years due to COVID-19, Christmas shopping this year will not be as careless as it used to be due to the rising prices driven by inflation levels not seen in decades.
"This year's Christmas and New Year holidays are marked by the energy and food crisis, which has already settled in our subconscious," Aleksander Lemut, head of retail company Fama based in Vipava in eastern Slovenia, told Xinhua. "It is evident that the purchasing power (of citizens) has fallen," he added.
"We expect to earn 2 to 3 percent more than in December 2021, but considering official inflation, this means that the sales volume will actually fall by at least 10 percent," Lemut said.
According to the country's Statistical Office, Slovenia's annual inflation reached 10 percent in November and was only slightly lower than the 11 percent registered in July, when inflation was at its highest level in over 20 years mainly due to the rising energy and food prices. The country's central bank said on Dec.16 that inflation is expected to remain high in 2023, particularly due to the increase in food prices and the knock-on effect of the rise in energy prices. The bank expects inflation to reach 6.8 percent in 2023.
Lemut said that consumers are mainly holding back purchases of expensive goods, such as high-quality wine or champagne and big pieces of prosciutto, while cheaper gifts sell better.
Many consumers told Xinhua that they cannot spend a lot on Christmas gifts because of the rising living costs, particularly that of heating. In Slovenia, the heating season normally lasts from October until next April, and energy prices have increased by 19.1 percent over the past year, statistics show.
"I have to be more careful with my purchases than in the past years because the prices have gone up a lot. I will still buy presents for everyone in the family and for my best friends, but I am trying hard to find gifts that are not expensive," commented Mojca, a female student from Vrhnika in central Slovenia.
Leonida, a businesswoman from Lasko in eastern Slovenia, said that inflation is the most noticeable at the gas pump. "I travel a lot for work and therefore I feel the bite of inflation," she said. "Due to inflation, we have had to reduce the number of presents that we will buy and are choosing cheaper gifts. At the same time, I will prepare some presents at home, like cookies or liqueurs."
Alessandro from Italy visited Ljubljana for the first time in over two years to see the lit-up streets and visit the city's Christmas fair. "I liked the decorations, but I see that the prices have gone up. However, my wife and I noticed that there are not as many visitors at the fair as there used to be before the pandemic," he said.
Slovenia suffered a steep fall in tourist arrivals during the pandemic and although there is a rebound, the number of foreign visitors is still much lower than it used to be. According to the Statistical Office, the number of foreign tourists more than doubled in the first ten months of this year to reach 3.6 billion, but still much lower than the figure of 4.3 million in 2019's same period, the last year before the pandemic.
Although the past years saw a rapid growth in online shopping, online retailers say that their sales volume in December is still lower than usual.
"It is obvious that more and more people with small wages find it hard to make ends meet and cannot afford to buy things that are not absolutely necessary after paying for heating and electricity," Aljosa Domijan, an owner of Slovenian online retailer Enaa, told Xinhua, while admitting that since early December, the sales of toys, perfumes and New Year decorations have increased significantly.
According to Domijan, online retailers are very worried about the rising transport costs, which could make online shopping less popular. Statistics show that over the past year, the cost of transport in Slovenia exceeded inflation and jumped by 14.5 percent. The rise in transport prices has been curbed by the government since March, when it introduced a cap on gasoline prices and later started regulating gasoline prices outside highways to cushion the impact of the energy crisis on the population.
Although the country has been badly hit by the global energy crisis, it does not expect the economy to slide into recession. According to the central bank, the economy will expand by 0.8 percent in 2023, down from 5 percent this year, mainly due to lower investment volumes and reduced household spending. The bank expects economic growth to accelerate in 2024 to 2.4 percent.