Estonia's e-stores see sales decline after peaking during pandemic
The e-stores of Estonia's grocery chains have seen a significant decline in sales volumes when compared to levels at the peak of the coronavirus pandemic. At the same time, the pandemic helped e-stores to grow their customer bases, with some still preferring to buy groceries online rather than shop in physical grocery stores. However, maintaining e-stores in the current economic climate will be a challenge in its own right.
Selver's online store "e-Selver," which delivers food to customers across Estonia, was continuing to increase in popularity until the end of the first quarter of 2022. However, after April this year, that period of growth for Selver and other online grocery stores appears to be over.
"All e-commerce businesses have noticed that demand is starting to decline," explained Kristjan Anderson, head of business accounting at Selver AS. "The first months of decline were based on (a comparison with) the very high growth figures of the previous year, so we were not able to exceed them," Anderson said.
"That's why the vast majority of e-retailers then experienced quite a noticeable setback in the figures for the second quarter of this year, when compared to last year," Anderson explained. "They varied between 20 and 50 percent, depending on the sector at the time," he added.
Anderson added, that this summer, however, e-Selver volumes returned to the levels they were at the same time last year, and are now following a slight upward trajectory.
Helen Lednei, e-commerce format manager at Rimi, also noted that interest in using e-shop services to buy groceries has waned. According to Lednei, based on the experience from previous years, e-commerce usage is directly influenced by covid trends.
"As soon as it starts being talked about more in the media, and some restrictions come in, the number of e-store customers increases immediately," said Lednei.
However, despite the current reduction in sales volumes, periods of high demand during the corona crisis have helped to increase the user base of e-stores.
Anderson, for instance, says, e-Selver volumes are still three to four times higher now than they were prior to 2019. At the same time, it was acknowledged that maintaining an e-commerce grocery business, and ensuring it remains profitable, is a challenge, particularly in the current economic climate. Coop, for example, stopped offering e-store services in Tallinn, Harjumaa and Pärnu in August, as the costs of running the service outweighed profits earned through sales.
Using Selver as an example, Anderson said, "Certain points of high demand have proven that it can be done profitably, but if you draw parallels with a physical store, yes, the physical store is obviously going to come out on top."
At the same time, both Anderson and Lednei confirm that e-Selver and Rimi's e-store will continue operating on the market.
"Today we are in the red, and we know that other retailers are also, but we have only been on the market for two years and the investments we have made in the development of the e-store need to be recouped. We need to find more efficient ways of doing things," Lednei said.
Follow ERR News on Facebook and Twitter and never miss an update!
Editor: Michael Cole