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The retail market in SwedenSteady growth and demand for new concepts
January 20, 2011 www.investsweden.se1January 20, 2011 www.isa.se
Dynamic market with openness to new concepts
� 9.4 million people with high purchasing power
� Retail growth market –among the highest retail growth in Europe, fuelled
by GDP growth and steady population growth.
� Stable ecnomic situation
January 20, 2011 www.investsweden.se2
� Demand and openness for international retail brands – both from the consumers and property owners.
� Good supply of retail space and professional property owners
� Ideal test market – Demanding consumers, early adopters and trend setters
� Franchising well established – dominated by domestic concepts, ample of opportunities for international franchisors. Record turnover growth.
� Strong growth in E-commerce – two-thirds of Swede’s shop from home at least once a year.
� Easy to do business – smooth procedures, transparent, great business environment.
Largest market in Northern Europe
� Gateway and regional bridgehead to attractive Scandinavian markets.
� Sweden 9.4 million consumers
� Scandinavian countries 25,500 million
� Northern Europe 100 million
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� Northern Europe 100 million
� The Scandinavian GDP is USD 1,440 billion, which makes it the 10th largest economy in the world
� Homogeneous market, native speakers in the whole region
� Preferred location for global HQ’s
� Large inflow of foreign investments
� Long history of international trade –large exporters
2.4
2.7
2.7
Sweden
Finland
Spain
GDP growth 1997–2011, average annual change, percent
1.9
2
2.1
2.1
Great Britain
Norway
Italy
Netherlands
Inflation rate1997-2011, annual average, percent
Strong and stable economy
January 20, 2011 www.investsweden.se4January 20, 2011 www.investsweden.se4
1.3
1.8
1.8
1.9
2
2.1
2.1
Denmark
Belgium
France
Norway
Austria
Netherlands
Great Britain
Source: National Institute of Economic Research Eurostat; OECD, 2008 (Figures for 2008 are preliminary)
1.4
1.6
1.6
1.7
1.7
1.8
1.9
1.9
Germany
France
Austria
Finland
Sweden
Belgium
Denmark
Great Britain
Source: National Institute of Economic Research Eurostat; OECD, 2008
Economic overview 2010
� Population 9.4 million
� GDP per capita 30,000 Euro
� GDP growth 2010 +4.3%
� Disposable incomes 19,400 Euro +3.6%
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� Inflation 3.4%
� Unemployment rate 8%
� Repro rate 1%
� Population density 22 per sq. km
� Currency SEK 100 = €10.7
People are wealthy …
Sweden
� GDP 280,983 billion EUR
� 30,000 euro per capita
Denmark
January 20, 2011 www.investsweden.se6
� GDP 163,677 billion EUR
� 29,700 EUR per capita
Finland
� GDP 153,612 billion EUR
� 28,900 euro per capita
Norway
� GDP 231,736 billion EUR
� 47,700 EUR per capitaGDP = Gross Domestic product 2008
Source: Nordic Statistical Yearbook 2009
Strong purchasing power in the regionGDP per capita in PPS
160
170
180
190
200
January 20, 2011 www.investsweden.se7January 20, 2011 www.investsweden.se7
100
110
120
130
140
150
160
Finland Denmark Iceland Sweden Norway
2007
2008
2009
Sourc: Eurostat EU-27 average=100
Swedish consumers - high spenders
� High proportion of income spent on retail.
� Private consumption growth stronger than any other European country.
� Large middle income segment with high disposable incomes.
� Openness to new international concepts and brands.
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� Openness to new international concepts and brands.
� Well-travelled consumers, always first with the latest, values quality, design and competetive prices.
� Acitvity-loving consumers – outdoor, home improvement, technology savvy, shopping is a spare time activity itself.
� World’s most advanced internet users – most buying decisions are taken online.
� Four distinct seasons creates demand for wide range of products
Strong retail growth2001-2007, percentage
January 20, 2011 www.investsweden.se9January 20, 2011 www.investsweden.se9
Source: Economist Intelligence unit 2008
Retail sales growth 2006-2009
10,00%
15,00%
20,00%
USA
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-10,00%
-5,00%
0,00%
5,00%
10,00%
2006 2007 2008 2009
USA
Denmark
EU (27)
Finland
Norway
Sweden
� Retail sales 50 billion EUR (2009)
� Growth 3.1%
� Retail sales 2010 Q1-Q3 strong: +3.7%
� Strong positive annual growth for 13 year,
Retail market overveiw 2009
50%17%
14%
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� Strong positive annual growth for 13 year,
average 4% per year.
� 50% of total household consumption
� Retail sales growth exceeds other EU
countries
� Ideal test market – demanding consumers
19%
Daily goods
Home/furnishing
Fashion
Leisure/Entertainment
Source: SCB
Strong growth in apparel segment
� 86 billion Euro
� Sales growth 75% during the last 10 years
� Women’s fashion 52% of total
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value - most lucrative
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€ 6 million
71%
€ 11million
13%
Source: SCB
10 largest clothing retailers in Sweden
Retailers StoresSales MSEK
2009 Change
%
H&M 161 7,881 5.9
Lindex 203 4,200 2.4
Varner Retail (Dressman, Cubus, Carlings, BikBok) 376 3,387 8.8
Kappahl 144 3,223 1.4
RNB Retail and Brands (Brothers & Sisters, Polarn o Pyret, NK, JC) 351 3.168 -8.7
Redcats Nordic (catalouge/distance selling, Ellos, La Redoute, etc) 3 3,000 0.0
MQ 102 1,730 -8.2
Gina Tricot 93 1,605 16.5
Bestsellers (Vero Moda, Vila, etc) 231 1,390 7.0
Indiska 63 804 3.1
Total 10 largest 1,727 30,390 2.5
Of Swedish originSweden is well known for it’s fashion wonder and sucessful retailers
expanding internationally
“Swedish consumers are the toughest in Europe and perhaps the world. They’re used to high standards and have high expectations. If you can win over Swedish consumers then you stand a good chance of being able to do so anywhere. “
A valued test market
Shaun Herbert, Managing director of advertising agency
January 20, 2011 www.investsweden.se15January 20, 2011 www.investsweden.se15
Shaun Herbert, Managing director of advertising agency
DDB Stockholm and in charge of the McDonald’s
rebranding program
"Sweden is a technology savvy market. Swedes tend to be on the leading edge of adopting new technologies. We want to continue to drive that forward and use Sweden as a test market.”
Steve Ballmer, CEO Microsoft
Fashion, Spain
Fashion, Denmark
Fashion, UK
Increasing inflow of foreign retail chains
Fashion, Spain
Fashion, Spain
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Fashion, UK
Fashion, Norway
Fashion, US Fashion, Germany
Fashion, US
Footware, Germany
Fashion, Spain
Fashion, Norway
Home funrnishing, Denmark
Eyeware, UK
Building & Construction, Germany
Toys, US
Toys, US
Increasing inflow of foreign retail chains
Furnitures, DK
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Home electonics, Germany
Food, Germany
Food, Norway
Telecommunications, UK
Home electronics, Norway
Toys, US
Building & Construction, Finland
Supply - Expansion of retail space
� Expansion and renovation projects are ongoing –
1 million sqm. of retail floor space is planned until 2012.
� Slower paste in 2009
� Increase in international retail space ownership.
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Mall of Scandinavia 100,000 sqm, Solna. Unibail Rodamco (UK)
Emporium65,000 sqm, Malmö. Steen & Ström (Norway)
Rents
Trends
� Weaker retailer demand, increased vacancies
� Increase in supply of retail space
� Prime location rents decreased in 2009 with approx. 9%
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Terms
� Standard lease terms 3-5 years in shopping centers and high street,
7-10 in retail parks.
� Retail rents often partly based on turnover
� Compared to other EU countries tenants have a strong legal position.
Rent levels and consumption in larger EU cities
City Consumption Non-
food in city area
Quarter 1 2009
Prime High street
rent level/sqm/year
1 London € 6,174 million € 6,440
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2 Paris € 5,879 million € 7,500
3 Rome € 5,762 million € 6,500
4 Madrid € 5,377 million € 2,640
5 Berlin € 5,080 million € 2,640
24 Copenhagen € 2,332 million € 2,000
26 Stockholm € 2,251 million € 1,230
Source: Jones Lang LaSalle and Experian
Franchising in Sweden is growing
Sales SEK Billion No of Franchisees No of Employees
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Source: HUI, Swedish Retail Institute
Strong growth for distance selling
2,11 billion euro
+6,3 % *
49 billion euro
share: 4,5 % **
Total sales: 8,5 billion euro.
Average growth: 17,4 percent
2,65 billion euro
+12 % *
60 billion euro
share: 4,2 % **
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Source: HUI
2,32 billion euro
+14,1 % *
44 billion euro
share: 5,2 % **
1,44 billion euro
+49,2 % *
36 billion euro
share: 4,0 % **
* = 2009 compared to 2008
** = Proportion of total retail trade
Strong growth in E-commerce and mail order
E-commerce sales up +15% 2009 in Sweden
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2,2 billion EUR 4% of the total retail sales
Price and convenience drive distance selling
Less expensive(25 %)
Easier(22 %) Greater selection
(18 %)
Primary reason to shop from home
More convenient(21 %)
Saves time(10 %)
Don’t know
(3 %)
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Primary reason to shop from home
Most popular products
24 %
1. Clothing
46 %
2. Home electronics 3. Books
39 %
Advanced IT infrastructure
4.
3.
2.
1.
Internet users
Sweden
Australia
Denmark
Iceland1. Sweden
2. US
3. Norway
4. Denmark
1. Iceland
2. Sweden
3. Norway
4. Denmark
5. Luxembourg
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10.
9.
8.
7.
6.
5.
Canada
US
Japan
Finland
South Korea
Norway
25
5. Switzerland
6. Netherlands
7. Canada
8. Iceland
9. Finland
10. Australia
Source: IMD World Competitiveness yearbok 2010
5. Luxembourg
6. Singapore
7. Canada
8. Australia
9. Japan
10. Hong Kong
Shopping tourism increasesGenerates significant retail sales
� All time high, SEK 80 billion (EUR 8 billion)
� Since 2005 the retail sales to tourists has increased with 100%
� 31% of the total retail sales from tourism shopping (50%) from
international visitors.
� International tourism to Sweden increasing more than to the rest of � International tourism to Sweden increasing more than to the rest of
the world, +5%
� Cross-boarder shopping magnet
Natural logistics base
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� National Investment Promotion Agency.
� Companies planning to establish operations or investing in Sweden can, free of charge, obtain information and assistance from ISA and its regional and international network.
� 80 professionals in Sweden, US, China, Japan and India has facilitated more than 1,000 investments during the last five years.
We help companies
worldwide to connect with
the best business
opportunities in Sweden
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investments during the last five years.
� Establishment support and practical advice when setting up a business in Sweden.
� Information on business opportunities in Sweden
� Matchmaking with Swedish companies in key sectors.
� Location advice and contacts with business service providers.
www.investsweden.se
January 20, 2011 www.investsweden.se29