According to Guido Pärnits, manager of Ülemiste Center shopping mall, the rapid increase in prices has not led to a reduction in shoppers at Estonia's malls. Parnits said that while less is being spent on home furnishings, people are spending more on both food and entertainment.
According to Pärnits, the number of visitors to Estonia's shopping malls in August has not fallen, and has either remained at the same level or increased. "In retail, of course, turnover is increasing because prices have increased and the number of items sold is smaller. However, in general, the KPIs or key performance indicators that we are monitoring have not become any more negative," he said.
Across the different product groups, it is home furnishings where sales have been hit hardest. "This product group is clearly in the red at the moment. However, the change in market competition may also have had a big part to play here, because the arrival of IKEA last year certainly had a major impact on this product group. I think the impact here is at least as big as that resulting from people buying fewer homes and postponing renovations," Pärnits said.
Sales of some categories of goods, such as electronics, are becoming increasingly popular via online platforms. Nevertheless, Pärnits said there is no sign of a decline electronics sales at the Ülemiste Center at least.
"Estonia is a small country, but at the same time money or people's wealth is very unevenly distributed. Both in Tallinn and across Estonia. I think that the pain might be felt more in places outside Tallinn or Harju County or perhaps the weaker malls in Tallinn. We don't seem to be doing as badly as some of the reports might suggest," Pärnits said.
Eateries and entertainment venues, which have moved to shopping malls are proving surprisingly popular and, according to Pärnits, showing the most growth.
"I have a feeling though that people are either using entertainment or eating out more than last year as a way of getting away from the overall negative vibe," Pärnits said.
Pärnits said that entertainment also includes cinema, where it is not prices that matter, but what kind of movies are shown.
"Entertainment, yes. Yu could say that the effects of Covid that were still there last year, even mentally, meaning people didn't dare go because of the crowds, are now a thing of the past and people are going again. If you take the malls and what are considered to be the entertainment parts of the malls, they are the plentiful food offers, the cinema and the children's play areas. These are all doing very well now," Pärnits said.
Pärnits said there is not likely to be room for a new shopping mall to be built in Tallin in the next 10 years, adding however, that the market is dynamic. "There will probably be no construction activity, but what is being done is the renovation or even expansion of existing malls. It's no big secret that the Ülemiste Center is also planning another expansion, and Rocca al Mare and Kristiine have ambitious plans," he said.
Editor: Michael Cole