The de-regulation of shop opening hours has spurred the growth of retail trade in Finland, says the Finnish Commerce Federation.
A survey conducted by the interest group found that the net sales of both daily consumer goods retailers and department stores grew in the first half of the year, despite the continuing price competition. The net sales of daily consumer goods retailers dropped by over two per cent and those of department stores by over three per cent in the corresponding period last year.
The de-regulation of opening hours has also resulted in a year-on-year increase of roughly 2,500 employees in the retail sector. The number of retail business owners, by contrast, has declined from the previous year.
“This is due to both changes in the retail sector and the difficulties of the owners of speciality shops,” says Jaana Kurjenoja, the chief economist at the Finnish Commerce Federation. “Small, owner-run shops and kiosks used to benefit from the regulation of opening hours.”
- Longer opening hours appeal especially to young urban residents (17 May, 2016)
- Retail sales picked up in February (28 March, 2016)
- Shops will be able to set their opening hours freely on 1 January (30 December, 2015)
- Parliament agrees to lift restrictions on shop opening hours (16 December, 2015)
The projected moderate recovery of purchasing power is similarly expected to drive the growth of retail trade over the latter half of the year, according to the Finnish Commerce Federation. The retail sector is nevertheless expected to expand only by some one per cent this year, falling well short of its average growth rate of almost five per cent in 1995–2008.
The Finnish Commerce Federation highlights that the recovery of purchasing power is expected to slow down next year and stymie the growth of the retail sector. Wholesale trade, meanwhile, is forecast to grow by some two per cent this year, driven largely by construction activities.
“Purchasing power would decrease and retail trade would slide back into the red next year without the tax concessions promised by the Government. The forecast growth is largely reliant on employment. If the ranks of the employed fail to grow, the growth of the retail sector may not be realised,” reminds Kurjenoja.
Juhani Pekkala, the managing director of the Finnish Commerce Federation, adds that tax policy casts another shadow over the outlook for the sector.
The Government, he estimates, may decide to fund the tax concessions by raising indirect taxes – a decision that would erode the purchasing power of consumers, increase the tax burden of service providers and raise costs at practically every stage of the supply chain.
“The euro-denominated costs will naturally be lower for small speciality shops, but in comparison to size and profitability of the businesses they can be devastating,” he warns.
Aleksi Teivainen – HT
Photo: Markku Ulander – Lehtikuva