Retail Under Pressure: Hungary Imposes New Restrictions on Large Stores

The Hungarian Parliament has approved legislation requiring retail stores larger than 400 square meters to operate at least one staffed checkout counter. The measure aims to protect consumer interests, especially those of elderly customers. Meanwhile, the government is also discussing amendments to the so-called “mall stop” decree, which could tighten rules on the transfer and lease of large retail spaces, reports Daily News Hungary.

The bill was initiated by the Christian Democratic People’s Party (KDNP), part of Hungary’s ruling coalition. The requirement applies to all retail units over 400 sqm. Shoppers must have the option of choosing between self-service machines and a human cashier. The goal is to make shopping easier for elderly people and to prevent potential job losses in the retail sector. Businesses failing to comply could face fines.

At the same time, the Hungarian government is considering amendments to Government Decree No. 143/2018, commonly known as the “mall stop.” This decree limits the construction and expansion of large retail facilities to maintain a balance between international retail chains and local businesses, and to control commercial density in urban areas. If the amendments pass, new rules could emerge regulating the transfer of ownership or lease of retail spaces larger than 400 sqm. Moreover, obtaining new official approvals might be required even if the store’s business profile remains unchanged.

In addition, stricter rules are being introduced for internal modifications within retail properties. For instance, installing partitions will now require separate authorization. This reflects a broader trend of tightening controls over the operation of large commercial premises. According to experts from CBRE, the retail sector in Hungary shows signs of recovery. In 2024, retail sales volumes increased by 2.6% compared to 2023, with notable growth in categories like cosmetics and pharmacies. Inflation has slowed, and demand for retail leasing remains stable, particularly in Budapest and on major tourist streets. New brands are entering the market, and developers are launching projects to expand and renovate major shopping centers.

The sector’s future development will depend largely on how successfully the government and business interests can be balanced. Dániel Odor, a partner at Taylor Wessing’s Budapest office, believes the new rules could fundamentally change the way commercial real estate is utilized in Hungary. Tying permits to specific individuals or legal entities may increase the administrative burden on property owners and potentially slow down transactions and leasing activities. A less predictable regulatory environment could also deter foreign investors who seek stability and transparency.

Lawyers at CMS also warn that the proposed changes could have a significant impact on the market. Any sale or lease transaction involving large retail premises would become subject to government approvals, creating risks if regulatory procedures are unclear or prolonged, even when tenants maintain their current business activities.

The Hungarian Shopping Centres Association (MBSZ) has criticized the draft amendments and submitted comments and proposals to the government. Among other suggestions, MBSZ insists that the changes should not apply when ownership of a property changes hands but the tenant remains the same. They also propose excluding internal alterations that do not affect the property’s total floor area (such as installing partitions within a store) from regulatory oversight.

Amid stabilizing demand and modest sales growth, market participants emphasize that sustainable development of the sector requires transparent and clearly defined procedures. Without such clarity, new restrictions risk complicating operations for market players and dampening investment activity.