Mixed Retailers in Estonia

2021 DEVELOPMENTS

Department stores under rising competitive threat from other sales channels

After a year during which sales fell sharply, mixed retailers saw a return to growth in 2021. This growth was not enough to compensate for the decline in sales in the previous year, however.

Work-from-home weakens demand for department store offer

Department stores in Estonia are typically positioned as old fashioned, but with a clear function, offering slightly more expensive and prestigious goods. .

Digital weakness exposed by crisis

Mixed retailers fall behind other sales channels because of their comparative lack of investment in e-commerce. The pandemic has shunted many consumers online, as restrictions on movement and other measures disincentivised them from visiting stores.

PROSPECTS AND OPPORTUNITIES

Department stores can benefit from sleeker model going forward

Mixed retailers is not expected to return to pre-pandemic levels before the end of the forecast period. There remain significant barriers to growth, especially in the larger part of the channel, department stores.

Variety stores meeting wide variety of needs, but face challenges

Variety stores are set to perform marginally better than department stores over the forecast period, largely as a result of the comparative newness of the channel, and the very different sales propositions of leading players like Magazijn, which offers a wide range of home and garden products from big-box outlets to Flying Tiger Copenhagen, which offers a rapidly changing line of low-priced small items from high street sites. These mixed offers cover a very wide range of consumer demands, and very often include products that consumers cannot find elsewhere.

Challenges from online, but new models may offer opportunities

Mixed retailers are coming under threat from new retail formats, above all the rapid evolution of the country’s e-commerce channel. The pandemic has driven a marked uptick in consumers shopping online.