According to preliminary data, the turnover of retail trade decreased by more than three per cent last year. The biggest drops were seen in the largest sectors of the specialty goods trade: hardware trade, household technology, interior decoration and sporting goods. The upward trend in sales seen during the COVID pandemic has now passed, and retail sales volumes have returned to 2019 levels.
The Finnish Commerce Federation predicts that the volume of sales will continue to decrease this year, but at a slower pace than last year, by about one per cent.
“Retail sales are hit particularly hard by the development of the specialty goods trade, as grocery and department store sales are already starting to grow. Next year, the turnover of retail trade will take on a slight upward trend,” predicts Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation.
International competition steers companies to streamline operations by means of digitalisation and automation and improve productivity across all trade sectors. Although commerce remains by far the largest employer in the corporate sector, the improvement in productivity is reflected in the employment of all its sectors, from wholesale to specialty goods trade. According to the forecast of the Finnish Commerce Federation, employment in the retail trade will continue its long-term downward trend and decrease by about three per cent between 2023 and 2025.
Various factors affect the forecast for the rest of the year
The forecast involves both positive and negative risks. Consumers’ purchasing power will gradually start to improve as pay increases and pension increases exceed the decelerating inflation rate. The lower interest rate projected for the rest of the year will also improve the financial situation of Finns who have a mortgage or are paying housing company loans.
“If the number of employed people in the economy does not significantly drop, the growth expected for retail trade at the end of the year may be faster than expected,” Kurjenoja estimates.
For example, the continuation of the precarious situation at the Suez Canal, which is already seen in rising transport costs, may be a major risk for trade. Its effects may later be reflected in delays in deliveries.
“The spring season, for example, may pass while deliveries arrive late. This would be difficult for the specialty goods and household goods trade. The potential tax increases decided by the government also pose a great risk as they will reduce purchasing power,” Kurjenoja points out.
In the longer term, the development of retail trade turnover is also slowed down by the ageing of the population.
For further information, please contact: Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)40 820 5378, jaana.kurjenoja(at)kauppa.fi
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