Low-price grocery and non-grocery stores continued to perform well in 2016, despite the economic situation. For many specialist retailers, low-price stores, such as variety stores and mass merchandisers, constitute a bigger threat to their operations than internet retailing. Much of this is because many Swedish consumers are opting for external commerce (externhandeln) rather than city shopping. Large shopping complexes on the outskirts of cities, where numerous stores are built next to each other, such as Väla outside of Helsingborg, and Erikslund outside of Västerås, are attracting more and more shoppers. These types of regional or external shopping areas tend to have a relatively large selection of mixed retailers, such as Rusta and ÖoB, and similar low-price stores, such as Jula and Biltema.
The department store chain Åhléns continued to lead mixed retailers in 2016, accounting for a 21% value share. Åhléns has a long-standing presence in the market, and has 68 outlets located around Sweden, including in the three largest cities – Stockholm, Gothenburg and Malmö. Whilst the company managed to maintain moderately stable value sales development throughout the review period, the number of its stores declined from 76 in 2015. As a mid-priced alternative the company has not managed to weather the economic turmoil as well as NK, for example, which targets a more exclusive consumer group, not as readily affected by the economically stringent times, or Dollarstore, Gekås Ullared and TGR, which compete based on value pricing.
The financial turmoil at the beginning of the review period, coupled with the fact that Swedish consumers have become more price-aware, resulted in the search for bargains on basic or staple items becoming more acceptable. Traditionally, low-cost goods were met with scepticism due to perceived poor quality. However, during the review period this perception changed, with conscious shopping and spending becoming rather trendy. As such, variety stores and mass merchandisers are expected to continue developing at a stable pace. Given that the competition is intense, and many consumers will remain price-sensitive, shopping around for the best deals, pricing strategies will be important in order to attract consumers to variety stores and mass merchandisers. Bulk discounts, loyalty cards and promotions presented in social media are predicted to intensify over the forecast period as the competition increases.
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