One of the country’s biggest trade union groups has called for action, after a study predicts 20% to 40% of Finnish retail stores could go out of business in the next decade.
A new report from the Federation of Finnish Commerce Kaupan Liitto says that although retail sales have been growing slowly over the last couple of years, things are about to change and there will be continued declines over the next ten years.
“Changes in purchasing power and employment are important signals for consumers” says the Federation’s Chief Economist Jaana Kurjenoja, who adds that if unemployment starts to rise, people will inevitably try to save more and spend less, and that might accelerate the retail decline.
The Federation of Finnish Commerce says by 2030 more than 1-in-5 retail stores will have gone bust as a conservative estimate – with the worst case scenario predicting up to 40% of businesses will close.
Some of the other reasons for a retail store decline are e-commerce, with Amazon (and other e-commerce retailers) coming into the Nordic market making it much easier for people to shop online and arrange home deliveries, rather than going into a traditional bricks and mortar store.
“Amazon has quickly captured the consumer market, wherever it has established itself in the Western world” says Kurjenoja.
PAM trade union reacts
The Chairperson of the Service Union United PAM says the fast pace of change in the retail sector brings challenges for everyone.
“The rapid change in e-commerce and consumer habits challenges all of us in the retail industry. At the workplace, the skills of our employees and ensuring continuity of learning are emphasized, and climate change requires us to develop more sustainable ways of working” says Annika Rönni-Sallinen.
PAM says the government should be preparing already to help businesses that will be impacted by such big changes in the consumer and retail landscape, especially around the challenges that increased e-commerce will bring.