Head of the Ülemiste shopping mall in Tallinn, Guido Pärnits, said that both consumer interest in expenses, and the low reference base compared with the pre-crisis period, plus the released pension funds following reforms which came into effect at the start of this year, are behind the recent retail trade growth. Retailers are also optimistic about the coming months and consider delivery difficulties and growing expenses more likely developments than declining consumer interest.
The sales revenue of Estonian retail trade enterprises increased by 10 percent to €784 million compared with last year, state agency Statistics Estonia says.
"They are undoubtedly positive indicators, but I wouldn't say there's anything shocking and surprising, they were expected," Pärnits.
Pärnits said that it must be taken into account both in terms of economic growth and growth of retail trade turnover that 2020 was poor as a reference base and a similar increase can be seen in other countries. "We're on an uptrend now, not a downtrend," he said.
The growth of retail trade in Estonia was also affected by the second pillar money paid out in the pension reform in the third quarter. Pärnits said that its effects can also be seen in October and November.
Pärnits said it must be understood that the previous closures also have a strong effect on it because people want to consume and more money is spent after the opening. "The need for consumption is still constant all the time," he said.
"The Ülemiste Center is such a large retailer that we can also make generalizations based on our turnover. If we compare the autumn of 2019, these are similar months. In 2019, there was no talk of a pandemic in Estonia yet," Pärnits said.
At the same time, consumers' behavior has changed, people visit the store much less often, but shop in much larger quantities.
Pärnits said that based on the example of Ülemiste Center, it cannot be said that shopkeepers should close their stores due to the pandemic, but that at the same time, it is difficult to make profit in this environment where prices are increasing.
"The usual rotation is still ongoing in trading. Not everything that shines is gold. There are a lot of expenses between zero and turnover, salary costs, transport, logistics. The profitability isn't huge," he said.
Pärnits added that November is likely to see things finish up in a good state, and the expectation is the same for December and the festive season. "The concern with the local retail business is that the goods don't arrive on time, the delivery times are very long," he said.
Retailers are rather optimistic about spring. "One thing is trade and its normal development, another is what the health crisis is bringing. When new strains emerge, there are unexpected closures and additional restrictions - which I hope will not come - they could turn things around again," Pärnits said.
Editor: Roberta Vaino