Retailing in Finland challenged by economic downturn
The Finnish retailing industry faced great challenges in 2013 as the Finnish economy experienced a downturn and the unemployment rate continued to increase, limiting the customer purchasing power. Also, the VAT rates in Finland were increased in January 2013, which was seen as a challenge by the retailers which were already struggling with customers limiting their purchases. As a result, the total retailing value growth suffered and slowed down when compared to the recent years in the review period. However, whilst value sales growth plummeted in some channels, other channels witnessed healthy and some even dynamic growth in 2013.
Consumers careful with spending
Several ongoing trends were seen in the Finnish retailing market. Consumers limiting their spending had the greatest impact on the market. In addition, private label developments continued to take place as retailers were trying to cater for the demand for more competitively priced goods. Many marketing strategies were used too to win over consumers. Moreover, the sales continued to migrate over to the internet retailing channel, challenging in-store sales even further and forcing many outlets out of business. The Finnish retailers put more emphasis on their online strategies as they also faced heavy competition from the international internet retailers.
Non-grocery retailers losing sales to hypermarkets and internet retailers
As the Finnish consumers were more careful with their spending, purchasing priorities changed too. This meant that non-grocery channels saw their sales cool down quicker whilst grocery retailers had a more satisfactory performance. Groceries seemed to be necessities whilst non-grocery purchases could be limited and postponed in the times of higher unemployment rates. Furthermore, non-grocery retailers continued to lose sales to the internet retailing channel and also to hypermarkets which offered consumers large selections of non-grocery products.
As the economic instability inevitably changed consumer purchasing habits, the players had to reconsider their retailing concepts, store outlays, product selections, consumer needs and marketing strategies. The competition remained fierce and big chains continued to conquer the market whilst many smaller independent retailers struggled to survive. Indeed, the total number of outlets continued to decline in 2013.
Improved growth in the forecast years
Retailing in Finland is predicted to see positive value growth in the forecast period as some improvement in the local economy is predicted to take place, allowing consumers to recover their purchasing power and spend more freely. However, whilst some channels will continue to struggle, other retailers will see better opportunities and growing demand. It is also clear that the successful retailers will have to have clear multichannel strategies in order to stay ahead of the competition and cater for the ongoing consumer needs and trends.
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The Retailing in Finland market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic number of stores, selling space and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- How big is the grocery/non-grocery/non-store channel in Finland?
- Who are the leading retailers in Finland?
- How is retailing performing in Finland?
- What is the retailing environment like in Finland?
- Which channels are winning or losing in the fight for consumers’ money?
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This industry report originates from Passport, our Retailing market research database.