Swedish retail companies have a bleak outlook for the next three months. According to the Swedish Trade Federation’s Retail Barometer, future expectations in the durable goods, grocery, and wholesale sectors fell in March. At the same time, the organization’s E-commerce Indicator shows that e-commerce slowed sharply in February.
For over three years, the outlook for retail companies—based on the parameters of sales, number of employees, and profitability—has been pessimistic. Never before in the history of the Retail Barometer has such a prolonged downtrend been observed. Confidence in the future—in both the durable goods and daily goods sectors—has plummeted in this month’s survey. The former fell by 3.0 units, resulting in an indicator value of 89.9, and the latter by 4.6 units, resulting in an indicator value of 92.0. The main reason for the sharp decline is an increasingly subdued outlook on future profitability and sales.
– The results we’re presenting today may come as a surprise to people across the country who have been following the debate recently. Still, we want to make our position crystal clear. The Swedish retail sector is facing incredibly tough times right now. There is no doubt that businesses and jobs across the country—in both large and small cities—are now at stake,” says Sofia Larsen, CEO of Svensk Handel, and continues:
– The fact that an industry as central and important as retail has been marked by pessimism for over three years should set off alarm bells. Right now, otherwise healthy businesses are going under, and with them, important jobs and tax revenue.
Furthermore, several factors suggest that this bleak trend may persist for some time. Rising inflation, which is pushing up market interest rates, combined with the current geopolitical uncertainty, is hitting consumers hard—and, consequently, retail companies as well.
– The fact that prices—and, consequently, interest rates—are rising rapidly is having a very negative effect on household consumption, which in turn threatens the recovery in the retail sector and in the Swedish economy as a whole. The retail sector finds itself caught between a rock and a hard place. As costs rise and profitability falls, companies must try to keep prices down to retain their customers. For many, this is unfortunately an impossible equation, says Sofia Larsen.
According to the Swedish Trade Federation’s E-commerce Indicator, e-commerce sales for the month of February totaled 9.7 billion kronor. This represents a 16 percent decrease compared with February 2024, further underscoring the vulnerable position of the Swedish retail sector.
– This was a double blow for e-commerce. Fewer people shopped online in February, and they spent less as well. This is clear evidence that the 2024 recovery has stalled and that consumers are still cautious about making purchases. This is undoubtedly a consequence of the tough economic situation we find ourselves in. For many e-commerce companies, these tough times are far from over,” says Per Ljungberg, Head of Innovation at Svensk Handel.
