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Retailer: Shoppers in Estonia only buying most essential necessities

Fish counter at a Selver supermarket. Photo is illustrative.
Fish counter at a Selver supermarket. Photo is illustrative. Source: Anna Aurelia Minev/ERR

People in Estonia are only buying the most essential necessities and erring toward sales and promotional products, while manufactured goods sales look to remain weak for quite some time yet, Selver business accounting director Kristjan Anderson said Tuesday.

"The decline in consumer confidence and decline in purchasing power is clearly reflected in people's daily shopping carts," Anderson said, commenting on the latest retail trade statistics released Tuesday. "Everything that isn't an everyday necessity – the purchases of such things have been put off. Whether into the near or distant future."

While grocery sales volumes are being viewed with optimism in terms of the months ahead, the same can't be said about manufactured goods sales.

"The decline has remained steadily on the negative side for the last six months," Anderson noted. "And there are quite a number of product groups where not only sales volumes are on the decline, but also turnover can't manage a repeat of last year's levels. So that's certainly bound to upset retailers a bit."

While Luminor chief economist Lenno Uusküla predicted in September that next year's increasing VAT will bring with it a wave of inflation at the end of this year, Anderson doesn't share this belief.

"Looking at the dynamics of manufactured goods sales right now, I'm rather pessimistic," the supermarket chain accounting director acknowledged. "If you already don't have the power to buy [these] products, then I see no potential for significant purchasing ahead of the 2 percent VAT hike."

He believes that consumers' advance purchases will more than likely remain on the marginal side. "There are certainly clients who may make a purchase or two in the final months of the year with that in mind, but I'm not seeing much potential," he said.

Anderson also highlighted that consumer loyalty in Estonia has changed as well, and massive price hikes have brought out shoppers' more rational and pragmatic side.

"[Shoppers are] turning significantly more to promotional goods, and checking out what various chains are offering," he described.

Looking at the overall statistics, it's evident that Estonian retailers are seeing volumes fall, Selver's business accounting director said.

"In short, what we're seeing is that retailers have lost an average of one product per receipt and some [grocery carts] have gone unpurchased altogether," he explained. So the assumption holds that people are increasingly shopping at different stores, but ultimately buying a bit less as well."

He added that the second inflation exceeded 10 percent, the share of promotional products and sales items immediately started to rise.

"If we want to look for growth anywhere in sales figures, then we can find it in the sales of promotional products, where growths are averaging 30-40 percent," Anderson said. "Marked down products are steadily accounting for more than 40 percent of [shoppers' grocery carts] in supermarkets – and that has shown no signs of abating."

The turnover of retail trade enterprises in Estonia this September totaled €869 million, marking a decrease of 7 percent on year at constant prices, Statistics Estonia announced Tuesday.

This decline in retail trade turnover was attributable chiefly to stores selling manufactured goods, as their turnover was down one tenth on year, Statistics Estonia analyst Johanna Linda Pihlak said in a press release.

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Editor: Aili Vahtla

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