Nordic Retail Industry - Deloitte
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Nordic Retail Industry February 2020
Top Nordic retailers
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
Source: Largest companies
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© 2020 Deloitte NSE LLP. All rights reserved.Sweden
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© 2020 Deloitte NSE LLP. All rights reserved.Sweden (1/2)
Consumer landscape
• Sweden is a wealthy country with one of the highest
58,425 59,707 61,115
70,000 56,914 800 levels of GDP per head in Europe, at estimated USD
60,000 55,371 701.3 736.2 55,371 in 2019. Economic growth has strengthened in
642.7 recent years, and prospects compare favorably with
50,000 586.9 600
535.2 most other west European countries.
40,000 31,416 • Most consumer goods industries are highly import oriented
27,826 30,063 400
30,000 23,466 25,475 and dominated by multinational companies, although Swedish
20,000 retail chains hold leading positions in the furniture and
200 clothing sectors notably IKEA, the largest furniture retailer
10,000 worldwide, and Hennes and Mauritz (H&M), the second largest
0 0 clothing retailer in the world.
2019 2020* 2021* 2022* 2023* • Consumer spending will grow relatively firmly as incomes rise
GDP per head (USD) Private consumption per head (USD) modestly owing to positive real wage growth and a general
drop in unemployment.
Nominal GDP (USD Bn)
Retail landscape • The Swedish market is mature. Growth will be driven
120.0 2.1% mainly by innovation and replacement needs for
104.8 consumer electronics, especially as Swedes are
2.0% 100.0 2.0%
100.0 92.2 generally early adopters and want the latest electronic
84.1 2.0%
77.1 goods. Growth will also be driven by food products
80.0 1.9% 1.9% 1.9% 1.9%
owing to health concerns.
1.9%
49.2 55.7 • Changing demographics and sociological trends, like more
60.0 40.7 44.8 53.3 1.8%
46.7 49.1 single-person households, will support long-term demand for
43.0 1.8%
36.4 39.3 housing, household goods, healthcare and leisure. Population
40.0 1.7% ageing will shift spending patterns from clothing to pharma
1.7% 1.7% and health products, and to high-end leisure activities.
20.0
1.6% • Demand for food and drink will grow steadily in 2019-23, with
organic, locally sourced and health food gaining market share.
0.0 1.6%
Because of lifestyle changes and rising income levels,
2019 2020* 2021* 2022* 2023*
consumption of packaged and easy-to-cook foods will
Retail sales (USD bn) Non-food retail sales (USD bn) continue to rise.
• Non-food product sales will grow in 2019-23, on the back of
Food retail sales (USD bn) Consumer price inflation (%) sustained economic growth and rising incomes.
Source: Economist Intelligence Unit *Estimated numbers
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© 2020 Deloitte NSE LLP. All rights reserved.Sweden (2/2)
Grocery retail market share (%) • 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.
2.1%
4.7% • The retail food market is dominated by ICA and Axfood. Axfood is particularly strong in the hard-
7.0% 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).
16.9% 51.5% • 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.
17.8%
• 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
ICA Axfood Coop Bergendahls Lidl Netto them. However, wine may be purchased through importers selling directly to consumers.
*2019
E- commerce
• 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.
Source: Economist Intelligence Unit, Statista
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© 2020 Deloitte NSE LLP. All rights reserved.Norway
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© 2020 Deloitte NSE LLP. All rights reserved.Norway (1/2)
Consumer landscape
69,016 70,177 71,566
80,000 67,274 600
65,021 540 560 • Although Norway’s consumer market is
510.6 500
60,000 459.3 477.2 small by European standards (with a
42,083 44,333 46,133 400 population of just 5.3m as at January 1st
38,068 39,986 2019), it is attractive to foreign suppliers,
40,000 300
particularly in the non-food sector. With few
200 local companies involved in manufacturing,
20,000 most consumer goods are imported. The food
100
sector is more sheltered from foreign
0 0 competition.
2019 2020* 2021* 2022* 2023*
GDP per head (USD) Private consumption per head (USD) Nominal GDP (USD Bn)
Retail landscape
100.0 2.3%
87.0 • Retail sales are expected to continue
90.0 2.2% 83.1 2.2%
78.4 growing after a sharp slowdown in 2015,
80.0 74.0 2.2%
70.0 especially in 2023.
70.0 2.1% 2.1%
2.0% • Real sales growth to average just 2.3% per year
60.0 2.1%
38.7 40.6 in 2019-23.
50.0 36.8 33.2 44.2 42.8 2.0%
37.8 42.7 40.4 • Retail sales in real terms grew by 5.5% in 2018 in
40.0 35.3 2.0% local-currency terms, but growth is expected to
2.0%
30.0 1.9% be slightly lower during the forecast period,
20.0 1.9% 1.9% despite an economic rebound and a subsequent
10.0 1.8% strengthening of Norwegian consumer confidence.
• Household finances remain in good shape, and
0.0 1.8%
low borrowing costs are underpinning demand for
2019 2020* 2021* 2022* 2023*
credit. Household credit growth grew by 5.7%
Retail sales (USD bn) Non-food retail sales (USD bn) year on year in January 2019.
Food retail sales (USD bn) Consumer price inflation (%)
Source: Economist Intelligence Unit *Estimated numbers
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© 2020 Deloitte NSE LLP. All rights reserved.Norway (2/2)
Grocery retail market share (%)
• 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,
3.8%
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
43.2% homogeneity of Norways grocery retail sector, and the preference for known products, this has made it
23.7% 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,
29.3% 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.
Norgesgruppen Coop Rema Bunnpris
*2019
E- commerce
• 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.
Source: Economist Intelligence Unit, Statista
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© 2020 Deloitte NSE LLP. All rights reserved.Denmark
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© 2020 Deloitte NSE LLP. All rights reserved.Denmark (1/2)
Consumer landscape
65,644
70,000 60,575 62,494 64,059 420 • The Danish consumer market is small by European
58,408 standards. Denmark has a population of about 5.75m
60,000 382.7 413.7
401.5 400 (which is forecast to grow by about 0.4% per year
50,000 376.4
during 2019-23 forecast period).
40,000 32,281 34,155 35,451 380
29,428 • Over recent years, consumer fundamentals in Denmark have
31,376
30,000 360 strengthened in response to steady employment gains, low
20,000 353.4 borrowing costs, negligible inflation and wealth effects from
340 rising property prices. The earlier slump in global oil prices
10,000 also delivered a boost to real household disposable incomes,
0 320 although this has faded.
2019 2020* 2021* 2022* 2023* • Income distribution will remain more than in most other OECD
GDP per head (USD) Private consumption per head (USD) countries.
Nominal GDP (USD Bn)
Retail landscape
80.0 72.9 1.8%
70.4
70.0 65.1 66.8 1.6% 1.6%
60.9 1.5%
60.0 1.4% 1.4%
1.0% • Sales volumes growth will slow significantly in 2019-
1.1% 1.2% 2020, with average growth of just 0.65%, before
50.0 37.7
32.7 1.0% growth picks up again for the rest of the forecast
40.0 30.1 34.1 34.3 36.2 35.2
32.9 32.1 33.0 period.
0.8%
30.0 • Diminishing pent-up demand, waning external stimulus, a
0.6% moderately firmer trend in inflation and the burden of
20.0 0.4% substantial consumer debt from Denmark's 2005-07 housing
10.0 0.2% bubble will weigh on consumer spending growth.
• Hence, retail volumes will expand at an annual average rate of
0.0 0.0%
about 1.3% in 2019-23.
2019 2020* 2021* 2022* 2023*
Retail sales (USD bn) Non-food retail sales (USD bn)
Food retail sales (USD bn) Consumer price inflation (%)
Source: Economist Intelligence Unit *Estimated numbers
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© 2020 Deloitte NSE LLP. All rights reserved.Denmark (2/2)
Grocery retail market share (%) • 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.
3.0% 2.9% 1.1%
• 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
11.4% Salling Group) and Fakta (Coop Danmark), and Reitan-owned Rema 1000. German hard discount
35.2%
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
11.9%
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.
34.5% • 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
Salling Group Coop Reitangruppen 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
Fria Kopman Aldi Lidl
operated under franchise by Reitan, will continue to expand.
Others
*2019
E- commerce
• 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.
Source: Economist Intelligence Unit, Statista
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© 2020 Deloitte NSE LLP. All rights reserved.Finland
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© 2020 Deloitte NSE LLP. All rights reserved.Finland (1/2)
Consumer landscape • An ageing demographic profile will continue
55,904 to support demand for healthcare and
60,000 51,386 52,905 54,400 340
49,789 leisure products. Meanwhile, an increase in
50,000 303.1 329.4 the number of one- and two-person
300.1 319 320
households will support demand for
40,000
29,137 30,673 31,639 300 housing and household goods.
26,965 29,082
30,000 • Income inequality in Finland is lower than the
278.5 280 European average; however, the gap is
20,000
widening. The percentage of households earning
10,000 260 more than US$50,000 stood at 42% in 2018, up
0 240 from 36% in 2017, and is expected to rise to
55% by 2023.
2019 2020* 2021* 2022* 2023*
• This may increase demand for luxury brands.
GDP per head (USD) Private consumption per head (USD) Nominal GDP (USD Bn) However, market maturity limits the scope for
further expansion.
Retail landscape
70.0 60.9 63.2 2.0% • Retail sales volume will grow by 1.5% on
1.6% 1.9% 1.9%
57.0 57.5 1.8% average in 2019-23 forecast period. Value
60.0 52.5 1.7% growth in local currency will be 3.2% in the
1.6%
1.4% same period. Sales in local-currency terms
50.0 1.4%
will grow by 2.4% in 2019.
40.0 1.2%
26.6 29.5 32.8 30.4 • Retail sales will be supported by a pick-up in real
29.1 31.5 29.5 1.0%
25.9 27.9 28.0 GDP growth, lower unemployment and higher
30.0 0.8% household income. Price will remain a focus as
20.0 0.6% the hard-discount sector continues to develop.
0.4% • Finnish consumers are environmentally
10.0 conscious and concerned about pollution.
0.2%
Retailers such as K Group, which owns the
0.0 0.0%
Kesko chain, market themselves as
2019 2020* 2021* 2022* 2023*
environmentally responsible by phasing out the
Retail sales (USD bn) Non-food retail sales (USD bn) use of plastic bags and installing solar panels on
store rooftops.
Food retail sales (USD bn) Consumer price inflation (%)
Source: Economist Intelligence Unit *Estimated numbers
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© 2020 Deloitte NSE LLP. All rights reserved.Finland (2/2)
Grocery retail market share (%)
• Domestic firms dominate the retail market, and price competition is high. S Group and K
3.6%
0.5% Group, both domestic retailers, lead the grocery retail market, with market shares of 46.4%
0.8% and 36.1% respectively.
3.0% • Lidl is gaining market share with 9.6%.
• Large chains are expected to continue expanding at the expense of small, independent specialist
9.6%
outlets, especially in food, clothing and home improvement.
46.4% • 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
36.1% 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
S Group K Group began testing delivery by drones in co-operation with a logistics company, Matkahuolto, which uses K
Lidl Tokmanni Group
Group outlets as parcel drop-off points.
Stockmann Minimani
Others
*2019
E- commerce
• 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.
Source: Economist Intelligence Unit, Statista
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