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CEO Karin Johansson. Photo: Swedish Trade Federation
Frontrow. Photo: Patricija Dacic
Desenio. Photo: Desenio
Swedish retail: higher turnover but weakened profits Swedish retail is one of the best-performing retail industries in Europe. While European consumers have been hit by the financial crisis and the economic downturn, Swedes have been shopping like never before. By Karin Johansson, CEO of the Swedish Trade Federation and Svensk Handel
The financial crisis was met with tax cuts and lower interest rates, which made both shopping and saving possible for the Swedes. In the absence of growth in European retail, this has made international real estate owners and retailers go all in on the Swedish market and the number of shopping centres has increased rapidly. This development has boosted the turnover in Swedish retail, which has been growing – but it has also created severe competition and weaker profits. The main reason behind higher competition and weaker retail profits is the great digital shift that has changed the retail industry and the economy as a whole. We 30 | Issue 94 | November 2016
now watch old companies go bankrupt and fall like dominoes, and new business models are quickly emerging. One part of the digitalisation of retail is e-commerce, an industry that has been growing at a rate of 15 to 20 per cent per year. Online players now penetrate around 15 per cent of non-food sales in Swedish retail and continuous growth has been forecast. This Christmas, Swedish retail is looking forward to new records in sales, but the sales will most likely be driven by campaigns and low prices, making profits decrease. Consumers are getting used
to buying more and more during campaigns and less and less at full price. In a longer-term perspective we see how consumption and retail will grow, but the companies of today will probably be replaced by those with different business models that can keep up with the demanding digital consumer while meeting the desire for low prices. Concepts that can compete with high quality in service and knowledge and adapt to the new digital reality will be the winners. Kårby Organics. Photo: Philipp Gallon
For more information, please visit: www.svenskhandel.se