nordic retail industry · 2020. 8. 30. · ikea ab furniture retail sweden/netherlands 2,757,049...

February 2020

Nordic Retail Industry

1© 2020 Deloitte NSE LLP. All rights reserved.

Top Nordic retailers

Source: Largest companies

Company Category HQ Turnover (‘000 EUR)

H & M Hennes & Mauritz AB Clothing retail company Sweden 20,342,064

Coop Danmark A/S Food retail and wholesale Denmark 4,759,424

Circle K Sverige AB Convenience stores Sweden 3,654,024

IKEA AB Furniture retail Sweden/Netherlands 2,757,049

Lidl Suomi Kommandiittiyhtiö Grocery chain Finland 1,449,327

Circle K Danmark A/S Convenience stores Denmark 1,253,885

Bergendahl & Son AB Wholesales and retail food, fashion Sweden 1,220,986

Circle K Norge AS Convenience stores Norway 1,219,129

Fakta A/S Supermarkets Denmark 1,143,554

Stockmann Oyj Abp Department store Finland 1,055,900

Ikea AS Furniture retail Norway 811,058

Norsk Butikkdrift AS Grocery chain Denmark 798,071

Tokmanni Group Oyj Retail chain Finland 796,500

Coop Øst SA Food retail and wholesale Norway 707,791

Coop Midt-Norge SA Food retail and wholesale Norway 619,882

© 2020 Deloitte NSE LLP. All rights reserved.2

Sweden


Sweden (1/2)

Source: Economist Intelligence Unit

55,37156,914

58,425 59,707 61,115

23,466 25,475 27,826 30,063 31,416

535.2586.9

642.7701.3 736.2

0

200

400

600

800

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2019 2020* 2021* 2022* 2023*

Consumer landscape

GDP per head (USD) Private consumption per head (USD)

Nominal GDP (USD Bn)

• The Swedish market is mature. Growth will be driven

mainly by innovation and replacement needs for

consumer electronics, especially as Swedes are

generally early adopters and want the latest electronic

goods. Growth will also be driven by food products

owing to health concerns.

• Changing demographics and sociological trends, like more

single-person households, will support long-term demand for

housing, household goods, healthcare and leisure. Population

ageing will shift spending patterns from clothing to pharma

and health products, and to high-end leisure activities.

• Demand for food and drink will grow steadily in 2019-23, with

organic, locally sourced and health food gaining market share.

Because of lifestyle changes and rising income levels,

consumption of packaged and easy-to-cook foods will

continue to rise.

• Non-food product sales will grow in 2019-23, on the back of

sustained economic growth and rising incomes.

• Sweden is a wealthy country with one of the highest

levels of GDP per head in Europe, at estimated USD

55,371 in 2019. Economic growth has strengthened in

recent years, and prospects compare favorably with

most other west European countries.

• Most consumer goods industries are highly import oriented

and dominated by multinational companies, although Swedish

retail chains hold leading positions in the furniture and

clothing sectors notably IKEA, the largest furniture retailer

worldwide, and Hennes and Mauritz (H&M), the second largest

clothing retailer in the world.

• Consumer spending will grow relatively firmly as incomes rise

modestly owing to positive real wage growth and a general

drop in unemployment.

77.184.1

92.2100.0

104.8

40.744.8 49.2

53.3 55.7

36.4 39.343.0 46.7 49.1

1.9%

1.7%

2.0%

1.9% 1.9%

1.6%

1.6%

1.7%

1.7%

1.8%

1.8%

1.9%

1.9%

2.0%

2.0%

2.1%

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2019 2020* 2021* 2022* 2023*

Retail landscape

Retail sales (USD bn) Non-food retail sales (USD bn)

Food retail sales (USD bn) Consumer price inflation (%)

*Estimated numbers


Source: Economist Intelligence Unit, Statista

51.5%

17.8%

16.9%

7.0%4.7%

2.1%

Grocery retail market share (%)

ICA Axfood Coop Bergendahls Lidl Netto

• E-commerce in Sweden is growing rapidly, helped by an internet-penetration rate of 87.8% in 2018. About 9% of retail sales currently take place

online, and this proportion will continue to expand over the forecast period (2019-23).

• Online retail accounts for about 9% of total retail sales, lower than in the UK and Germany, but in line with the EU average. Swedish e-commerce customers

estimate USD 92.4 Mn spend on e-commerce channels in 2018.

• Purchases of consumer electronics accounted for 23% of all online purchases in 2018, while spending on clothing and shoes jumped by 23%; media and books

(27%); health and beauty (32%); and furniture (12%). Toys and baby products recorded the least rate of expansion in online sales in 2018 with growth of 7%.

Meanwhile the food sector grew at 6% growth in 2018.

• The Swedish e-commerce market is mostly based on smaller, independent "web shops" such as Zalando (with a 21% market share), whereas US-based

companies including eBay and Amazon hold market shares of 10% and 9% respectively.

• Sweden has adopted m-commerce (e-commerce through mobile phones) payment systems comparatively early, partly reflecting a joint venture by four major

mobile network operators - Telenor, Tele2, Telia and the Swedish branch of Three, that provided a joint mobile-payments platform in 2013. New start-ups since

then have facilitated contactless payments, and further growth of m-commerce is expected in 2019-23.

Sweden (2/2)

• The retail market is well developed and consolidated. A few large chains account for over

half of the retail market and dominate food retailing, clothing and furniture in particular.

• The retail food market is dominated by ICA and Axfood. Axfood is particularly strong in the hard-

discount segment through its Willys brand.

• Discount stores (mainly Germany's Lidl and Denmark's Netto) have been present in Sweden since the

2000s, but sales floundered for some time. Consumers tended to prefer large grocery chains such as

ICA, Coop and Axfood (operating Hemkop, Willys and PrisXtra).

• However, Lidl is seeking to boost its market share by expanding its range of organic and locally sourced

foods. In doing so, Lidl is hoping to tap into the preference of Swedish consumers for items that

promote sustainability and healthy living.

• Netto, which has over a 2% share in the discount format, was acquired by Coop Butiker &

Stormarknader (Coop), which operates 240 of the total 650 outlets owned by Coop in Sweden in May

2019. The acquisition will help Coop increase sales volumes.

• Almost all alcohol sales, except for beer, are through the state alcohol monopoly, Systembolaget.

Although Systembolaget's stores may carry different varieties, there is no price competition among

them. However, wine may be purchased through importers selling directly to consumers.

E- commerce

*2019


Norway


Norway (1/2)


65,02167,274

69,016 70,177 71,566

38,068 39,986 42,083 44,333 46,133459.3 477.2

510.6540 560

0

100

200

300

400

500

600

0

20,000

40,000

60,000

80,000

2019 2020* 2021* 2022* 2023*

Consumer landscape

GDP per head (USD) Private consumption per head (USD) Nominal GDP (USD Bn)

• Retail sales are expected to continue

growing after a sharp slowdown in 2015,

especially in 2023.

• Real sales growth to average just 2.3% per year

in 2019-23.

• Retail sales in real terms grew by 5.5% in 2018 in

local-currency terms, but growth is expected to

be slightly lower during the forecast period,

despite an economic rebound and a subsequent

strengthening of Norwegian consumer confidence.

• Household finances remain in good shape, and

low borrowing costs are underpinning demand for

credit. Household credit growth grew by 5.7%

year on year in January 2019.

• Although Norway’s consumer market is

small by European standards (with a

population of just 5.3m as at January 1st

2019), it is attractive to foreign suppliers,

particularly in the non-food sector. With few

local companies involved in manufacturing,

most consumer goods are imported. The food

sector is more sheltered from foreign

competition.

70.074.0

78.483.1

87.0

36.8 38.7 40.6

42.744.233.2

35.337.8 40.4 42.8

2.0%

1.9%

2.2%

2.0%2.1%

1.8%

1.8%

1.9%

1.9%

2.0%

2.0%

2.1%

2.1%

2.2%

2.2%

2.3%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

2019 2020* 2021* 2022* 2023*

Retail landscape



*Estimated numbers



• Norway and Finland rely the most on foreign players, especially China, the UK and Sweden, with a preference for home delivery.

• In the Nordic region Norway spends the most on electronic equipment ordered online. The average amount spent per consumer online monthly was USD 244, with

63% of consumers shopping online monthly, second only to Sweden.

Norway (2/2)

• In 2018, Norgesgruppen was the leading grocery retailer in Norway, reaching a market

share of roughly 43 percent, based on sales.

• It was ahead of Coop, Rema and Bunnpris.

• The Norwegian grocery retail and wholesaling group Norgesgruppen operates the supermarkets Kiwi,

Meny, Jacob’s, Spar, Eurospar, Joker and Nærbutikken, the kiosks Deli de Luca and MIX, the Dolly

Dimple’s restaurants as well as the wholesaler ASKO.

• The retail market for groceries is also characterised by a high degree of vertical integration, with

wholesaling and retailing operations typically owned by the same company. When combined with the

homogeneity of Norways grocery retail sector, and the preference for known products, this has made it

extremely hard for foreign companies to enter the market without local representation.

• The Norwegian Competition Authority has extended by two years its requirement that some companies

in certain sectors, including the grocery industry, report to the authority on acquisitions and mergers,

even if deals do not meet the authorities financial threshold for reporting. In the grocery industry the

requirement applies to Norgesgruppen, Coop, Rema and Bunnpris. The requirement is now in place

until 2020.

• In November 2018, the Norwegian government delivered a report to the Storting (parliament) on the

state of the grocery industry and proposed 39 measures intended to improve competition in the

industry and lower prices. The governments plan is based in part on recommendations from the

Competition Authority.

• The government has also said that it is likely to earmark additional funds for the authority to help it to

monitor the industry more closely.

E- commerce

43.2%

29.3%

23.7%

3.8%


Norgesgruppen Coop Rema Bunnpris

*2019


Denmark


Denmark (1/2)


58,40860,575 62,494 64,059

65,644

29,428 31,37632,281 34,155 35,451

353.4

376.4

382.7 401.5413.7

320

340

360

380

400

420

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2019 2020* 2021* 2022* 2023*

Consumer landscape

GDP per head (USD) Private consumption per head (USD)

Nominal GDP (USD Bn)

• Sales volumes growth will slow significantly in 2019-

2020, with average growth of just 0.65%, before

growth picks up again for the rest of the forecast

period.

• Diminishing pent-up demand, waning external stimulus, a

moderately firmer trend in inflation and the burden of

substantial consumer debt from Denmark's 2005-07 housing

bubble will weigh on consumer spending growth.

• Hence, retail volumes will expand at an annual average rate of

about 1.3% in 2019-23.

• The Danish consumer market is small by European

standards. Denmark has a population of about 5.75m

(which is forecast to grow by about 0.4% per year

during 2019-23 forecast period).

• Over recent years, consumer fundamentals in Denmark have

strengthened in response to steady employment gains, low

borrowing costs, negligible inflation and wealth effects from

rising property prices. The earlier slump in global oil prices

also delivered a boost to real household disposable incomes,

although this has faded.

• Income distribution will remain more than in most other OECD

countries.

60.965.1 66.8

70.4 72.9

30.132.1

32.734.3 35.232.9 33.0

34.1 36.237.7

1.1%1.0%

1.4%1.5%

1.6%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

2019 2020* 2021* 2022* 2023*

Retail landscape



*Estimated numbers



• Supported by the relative affluence of Danish consumers and the country’s high-quality telecommunications infrastructure, e-commerce will

remain a primary driver of turnover growth in the coming years as retailers continue to develop their online presence amid rising demand for

greater value, personalisation and convenience. The trend towards multichannel retailing will deepen as internet-only retailers seek to expand

their presence by opening physical outlets.

• Events, holidays, clothing and sporting goods were among the most popular items purchased online in 2018. Online grocery shopping has been slow to take off,

but demand is rising quickly from a low base. Online purchase of prescription and non-prescription medicine is growing. However, more Danes purchase

electronics and computer hardware in stores than online.

• Popular online retailers include Elgiganten (Denmark/Sweden), which focuses on electrical goods. Other popular Danish sites include Wupti (a broad range of

goods), Saxo (books), Bestseller (apparel and footwear) Matas and NiceBeauty (both health and beauty).

• Amazon (US), H&M (Sweden) and Zalando (Germany) have a strong presence.

• Apopro is an online pharmacy which offers prescription and non-prescription medications as well as consumer advice from pharmacists through online chat and

video calls. Other online pharmacies include Webapoteket and apotekeren.dk.

Denmark (2/2)

• Based on sales, the Salling Group had a market share of slightly more than 35 percent in

Denmark in 2018. It was ahead of Coop, Reitangruppen and some others.

• Formerly known as Dansk Supermarked Group, the Salling Group operates the stores Bilka, Føtex,

Netto, BR and Salling. Additionally, the group consists of several online shops as well as franchises.

• The discount sector continues to grow. The market leaders are two domestic retailers, Netto (owned by

Salling Group) and Fakta (Coop Danmark), and Reitan-owned Rema 1000. German hard discount

chains Aldi and Lidl are also present in Denmark.

• Lidl plans to open about 100 new stores in Denmark within ten years, at a rate of 10-15 stores

annually. The chain plans to focus on the capital Copenhagen region and Aarhus, another densely

populated Danish region. Lidl has also increased the number of items it carries in its stores, by about

300 stock-keeping units.

• Hypermarkets and superstores are operated by the market leaders, Coop Danmark and Salling Group.

Both have relatively large networks. However, a small domestic market and planning restrictions

imposed by local authorities on outlets larger than 3,500 sq metres inhibit the growth of large stores.

• Kiosks fill a niche role in city-centre convenience retailing. Modern stores such as 7-Eleven, which is

operated under franchise by Reitan, will continue to expand.

E- commerce

35.2%

34.5%

11.9%

11.4%

3.0% 2.9% 1.1%


Salling Group Coop Reitangruppen

Fria Kopman Aldi Lidl

Others

*2019


Finland


Finland (1/2)


49,78951,386 52,905 54,400

55,904

26,965 29,08229,137 30,673 31,639

278.5

300.1303.1

319329.4

240

260

280

300

320

340

0

10,000

20,000

30,000

40,000

50,000

60,000

2019 2020* 2021* 2022* 2023*

Consumer landscape

GDP per head (USD) Private consumption per head (USD) Nominal GDP (USD Bn)

• Retail sales volume will grow by 1.5% on

average in 2019-23 forecast period. Value

growth in local currency will be 3.2% in the

same period. Sales in local-currency terms

will grow by 2.4% in 2019.

• Retail sales will be supported by a pick-up in real

GDP growth, lower unemployment and higher

household income. Price will remain a focus as

the hard-discount sector continues to develop.

• Finnish consumers are environmentally

conscious and concerned about pollution.

Retailers such as K Group, which owns the

Kesko chain, market themselves as

environmentally responsible by phasing out the

use of plastic bags and installing solar panels on

store rooftops.

• An ageing demographic profile will continue

to support demand for healthcare and

leisure products. Meanwhile, an increase in

the number of one- and two-person

households will support demand for

housing and household goods.

• Income inequality in Finland is lower than the

European average; however, the gap is

widening. The percentage of households earning

more than US$50,000 stood at 42% in 2018, up

from 36% in 2017, and is expected to rise to

55% by 2023.

• This may increase demand for luxury brands.

However, market maturity limits the scope for

further expansion.

52.557.0 57.5

60.9 63.2

26.6 29.129.5

31.5 32.8

25.9 27.9 28.0 29.5 30.4

1.4%

1.6%

1.7%

1.9% 1.9%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2019 2020* 2021* 2022* 2023*

Retail landscape



*Estimated numbers



• Although Finland ranks among the world leaders in internet connections per head, the use of the internet for food and other shopping is an area

where there is still considerable room for growth. Store-based retailing continues to dominate the Finnish retailing environment, but many such

retailers now use the internet as a sales channel as well. A leading player is Verkkokauppa.com.

• Shoes and clothing are the most popular online purchases. The total value of Finnish e-commerce in 2018 was about USD 3.1 bn, up from USD 3 bn in 2017. Both

e-commerce and m-commerce (via mobile phones) are expected to increase over the 2019 – 2023.

• In March 2018, K Group relaunched its online grocery business, and it has expanded delivery service to include the larger cities of Turku, Tampere and Oulu with

the help of its own fleet of delivery vehicles. Consumers can order via internet and a mobile-phone app.

• AliExpress, owned by Alibaba, has partnered with Klarna, a Swedish payments provider, a Dutch payments company, Adyen, and an Alibaba payment company,

Alipay, to roll out Klarna’s pay-after-delivery technology in Finland, as well as in Austria, Germany and the Netherlands. This allows customers in the Nordics to

have the option of paying for their products 14 days after delivery, thus giving them the chance to try their purchases before payment.

• Asos, has also partnered with Klarna to use its pay after- delivery technology in Scandinavia.

Finland (2/2)

• Domestic firms dominate the retail market, and price competition is high. S Group and K

Group, both domestic retailers, lead the grocery retail market, with market shares of 46.4%

and 36.1% respectively.

• Lidl is gaining market share with 9.6%.

• Large chains are expected to continue expanding at the expense of small, independent specialist

outlets, especially in food, clothing and home improvement.

• Retailers cluster around the regional urban population centres. In the smaller communities that are

scattered around the lakes that divide the Finnish countryside, neighbourhood stores and hypermarkets

are common. Online shopping is making it increasingly easier for consumers in smaller areas to buy a

wider variety of goods.

• However, logistics is a major issue in some areas of the countryside because of the significant

distances, and cold weather conditions can also hamper distribution. K Group has been rolling out its

own delivery system to help it to expand its online food retailing business. In March 2019 K Group

began testing delivery by drones in co-operation with a logistics company, Matkahuolto, which uses K

Group outlets as parcel drop-off points.

E- commerce

46.4%

36.1%

9.6%

3.0%

0.8%0.5%

3.6%


S Group K GroupLidl Tokmanni GroupStockmann MinimaniOthers

*2019

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nordic retail industry · 2020. 8. 30. · ikea ab furniture retail sweden/netherlands 2,757,049...

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