World market price increase boosts shops’ turnover – employment rate is declining
According to the Finnish Commerce Federation, over the next two years, the increase in turnover in retail trade will be mainly due to the increase in world market prices. The cost of raw materials and energy in particular will lead to higher prices. In the last quarter of last year, the growth in turnover was based solely on the increase in prices. After the pandemic period, employment in the retail sector is expected to decline.
According to the commerce sector forecast prepared by the Finnish Commerce Federation, the euro-denominated turnover of retail trade grew by nearly five per cent and the volume of turnover adjusted for price volatility by about three per cent. In the last quarter, the volume of turnover contracted and the growth was based on the increase in prices.
The brisk rise in wholesale prices and energy costs in particular increased the costs of commerce and hindered the growth in turnover at the end of the year.
“The effects of problems in availability and logistics and prices of raw materials and energy are only now being reflected in the wholesale and retail prices,” says Jaana Kurjenoja, Chief Economist at the Finnish Commerce Federation.
This year, the growth in retail sector turnover volume will slow down significantly from the pandemic-induced peak to approximately 1–1.5 per cent. The volume of turnover will not grow much over the next couple of years, and the development of euro-denominated turnover will be based on a cost-price spiral.
Impact of pandemic peak on employment fades
International and domestic competition in both wholesale and retail trade has increased the need for higher efficiency of operations and for cutting costs. They have been implemented through measures such as digitalisation, automation of operations, development of logistics, shortening of supply chains, and procurement cooperation.
In 2019, 9,000 employees were lost from retail trade, and in 2020 approximately 15,000. Employment fell particularly in the speciality goods trade. However, last year, the pandemic enhanced the demand for labour in the retail sector, and the employment rate in both daily consumer goods trade and speciality goods trade rose by a total of 20,000.
According to the forecast of the Finnish Commerce Federation, after the pandemic peak, employment in the retail sector will again adopt a downward trend.
“Despite this development, commerce is by far the largest employer in the corporate sector. If commerce is to continue creating employment in Finland, taxation policy should be used to support purchasing power and contain the cost of employment,” Kurjenoja says.
Further information:
Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)40 820 5378, email: jaana.kurjenoja(at)kauppa.fi
