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Analyst: People are extremely worried about their finances

A supermarket checkout.
A supermarket checkout. Source: Priit Mürk/ERR

Estonia experienced one of the European Union's biggest retail contractions last year with sales falling by 8 percent compared to 2022. Now more and more people are worried about unemployment and the economic downturn.

Industrial goods stores saw the biggest change last year with a sales revenue decrease of 11 percent. Grocery stores saw a 4 percent drop.

Supermarket Rimi's mainly sells consumer goods, but there are also industrial goods.     

"If you compare how industrial goods fared in 2023 compared to 2022, we lost somewhere around 10 percent of total industrial goods sales. If you look at the categories in which turnover [declined] the most, household appliances and all kinds of small appliances stand out, plus toys. Industrial goods is the kind of group where people have the opportunity to decide whether they need this item today, whether they are going to buy this product or not," Marilin Jürisson, Rimi Estonia's purchasing manager, told Tuesday's "Aktuaalne kaamera".

While more purchases are made in the run-up to the holidays, there was a 5 percent decline in December 2023 in comparison to December 2022.

Tõnu Mertsina Source: Priit Mürk/ERR

"Fewer toys were bought. It's hard to say whether gifts were not given, but there are all sorts of foreign sites where you can order things. People are certainly comparing where they can get the same product cheaper," Jürisson said.

Swedbank's Chief Economist Tõnu Mertsina said the situation with trade was bad last year as a whole.

"If we compare the sales volumes of Estonian retail companies with those of other European countries, Estonia saw one of the biggest falls last year. If we were to identify the retail sectors that were the biggest contributors to last year's downturn in retail sales, it was supermarkets, because of their large share. Stores selling household goods, building materials, sporting goods, etc," said Mertsina.

People are extremely concerned about their finances at the moment, Mertsina. One of the reasons behind this is tax increases.

"There are growing fears that unemployment will rise and with it a worsening of their financial situation in the coming months. And even if real wages have already been rising for some months, it is too much to expect a positive effect on consumption in the short term," the economist said.


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Editor: Marko Tooming, Helen Wright

Source: Aktuaalne kaamera

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