Friday, April 3, 2015
Sunday, March 15, 2015
On 15 December 2014, the Hungarian Parliament voted for the Sunday closure of shops as of 15 March 2015. This closure will apply to grocery, clothing, DIY, furniture, and electronics shops, as well as all other kinds of specialised retail stores. However, Hungarian consumers will still be able to shop on Sundays in pharmacies, at airports and railway stations, petrol stations and hospitals. Tourism service providers and shops in hotels also appear to be exempt for the impending closure rules. In addition, shops located in sports stadiums may also open during games held on Sundays.
The prescribed closure will apply not only on Sundays, but also to all other days of the week for the period between 10:00 p.m. and 6:00 a.m.
As always, a number of exceptions have also been adopted for the new law. Retail shops with a sales area below 200 sqm will not fall under the closure requirements, provided that the sales personnel consists of the owner holding at least 20% interest in the shop and his or her family members.
Shopping malls may also keep open, but the individual retail shops therein must individually comply with the closure rules. Accordingly, their permitted opening hours will depend primarily on the size of their sales area and their ownership structure.
Certain flower shops, newspaper stands and bakeries may also open Sundays, but only in the morning. Bakeries enjoy another exception: they may also open one hour earlier on weekdays, ie already at 5:00 a.m.
Furthermore, the Government has reserved its right to allow for further necessary exceptions by adopting individual Government Decrees that will set forth such exceptions.
Shops in breach of the new closure rules will be fined and may be ordered to remain closed for three to seven days. Upon committing a fourth breach, a shop may be ordered to close for a year.
It is interesting to note that Hungary’s two largest trade unions have also argued against the new law. However, the three largest domestic-based retail chains have supported the new law, and it is widely known that the international retails chains active in the country are expected to suffer from it. This reflects the fact that the Hungarian chains generally operate in a franchise-like system and many of their stores are rather small.
According to statistics, 11% of the retail turnover in Hungary is realised on Sundays. In terms of shop size and types, the biggest chunk (14%) of the sales turnover is made in hypermarkets, while 73% of the turnover in foodstuffs is realised in shops with sales areas larger than 200 sqm.
As the bill was voted on only on 15 December 2014, the summary provided above is based on initial news reports. The exact text of the newly adopted law and all the details will probably be available only during the course of the week of 22 December 2014.
A new law passed earlier this week will see mostly large retail stores no longer being able to trade on Sundays. The new law, which takes effect from 15 March 2015, will apply to retail activity in spaces exceeding 200 square metres. Further restrictions apply where the Sunday workforce does not include a business owner with a 20% stake in the business or a family member.
This means that small, mainly family owned businesses will still be able to trade as will other small retailers.
The reform was originally proposed by the Christian Democrats. Prime Minister Viktor Orban has supported the new ‘Sabbath law’ which recognises Sunday as a Christian day of rest, noting that Germany and Austria have similar restrictions in place.
Exceptions include, but are not limited to, retail units at airports, train stations, and hospitals along with tobacconists, pharmacies, farmers’ markets, bakeries and petrol stations. There are also restrictions on business hours.
There are special exceptions for trading at Christmas
The new law is expected to cause disruption for larger owned foreign supermarkets such as Tesco and Auchan. Critics point to the economic impact involved and also the potential loss of jobs.
In an era when big-box retailers are opening their Black Friday sales on Thanksgiving, a 30-year-old Illinois law to require car dealers’ sales departments to close on Sundays may seem a bit quaint and outdated. But the law has served consumers and dealers well over the years, and it continues to do so. The law should be left alone.
Buying a car is a large and complicated transaction. Eighty-four percent of new-car purchases involve financing which has to be arranged through lenders that are closed on Sunday. Dealers who deliver cars without financing arranged do so at risk and often have to call customers back to the dealership if their efforts to obtain the lowest rates prove fruitless. That makes for unhappy customers. Dealers, under ever-increasing scrutiny from regulators regarding the financing they arrange, need to do so when the lenders are open, to protect themselves and to treat their customers right.
Dealers have relationships with a minimum of five to 10 lenders and work to get their customers the best loan terms to keep monthly payments low. Dealers would be unable to arrange the best finance terms for their customers on a Sunday when the lenders are closed. It’s that simple.
Consider the real estate market. Home shoppers like to visit real estate open houses on a Sunday afternoon, but no one actually buys a house on Sunday. They wait until Monday, when the banks are open and they can get a mortgage.
The same is true in the car business — most consumers’ second-biggest purchase. Walk up and down any car dealer row on a Sunday afternoon and plenty of folks are browsing the lots, checking out the inventory. Consumers love it. They don’t mind coming back another day to take a test drive and make a deal. Read more