Retail 2010 nov

The retail market in SwedenSteady growth and demand for new concepts

January 20, 2011 www.investsweden.se1January 20, 2011 www.isa.se

Dynamic market with openness to new concepts

� 9.4 million people with high purchasing power

� Retail growth market –among the highest retail growth in Europe, fuelled

by GDP growth and steady population growth.

� Stable ecnomic situation

January 20, 2011 www.investsweden.se2

� Demand and openness for international retail brands – both from the consumers and property owners.

� Good supply of retail space and professional property owners

� Ideal test market – Demanding consumers, early adopters and trend setters

� Franchising well established – dominated by domestic concepts, ample of opportunities for international franchisors. Record turnover growth.

� Strong growth in E-commerce – two-thirds of Swede’s shop from home at least once a year.

� Easy to do business – smooth procedures, transparent, great business environment.

Largest market in Northern Europe

� Gateway and regional bridgehead to attractive Scandinavian markets.

� Sweden 9.4 million consumers

� Scandinavian countries 25,500 million

� Northern Europe 100 million


� Northern Europe 100 million

� The Scandinavian GDP is USD 1,440 billion, which makes it the 10th largest economy in the world

� Homogeneous market, native speakers in the whole region

� Preferred location for global HQ’s

� Large inflow of foreign investments

� Long history of international trade –large exporters

2.4

2.7

2.7

Sweden

Finland

Spain

GDP growth 1997–2011, average annual change, percent

1.9

2

2.1

2.1

Great Britain

Norway

Italy

Netherlands

Inflation rate1997-2011, annual average, percent

Strong and stable economy

January 20, 2011 www.investsweden.se4January 20, 2011 www.investsweden.se4

1.3

1.8

1.8

1.9

2

2.1

2.1

Denmark

Belgium

France

Norway

Austria

Netherlands

Great Britain

Source: National Institute of Economic Research Eurostat; OECD, 2008 (Figures for 2008 are preliminary)

1.4

1.6

1.6

1.7

1.7

1.8

1.9

1.9

Germany

France

Austria

Finland

Sweden

Belgium

Denmark

Great Britain

Source: National Institute of Economic Research Eurostat; OECD, 2008

Economic overview 2010

� Population 9.4 million

� GDP per capita 30,000 Euro

� GDP growth 2010 +4.3%

� Disposable incomes 19,400 Euro +3.6%


� Inflation 3.4%

� Unemployment rate 8%

� Repro rate 1%

� Population density 22 per sq. km

� Currency SEK 100 = €10.7

People are wealthy …

Sweden

� GDP 280,983 billion EUR

� 30,000 euro per capita

Denmark



� 29,700 EUR per capita

Finland


� 28,900 euro per capita

Norway


� 47,700 EUR per capitaGDP = Gross Domestic product 2008

Source: Nordic Statistical Yearbook 2009

Strong purchasing power in the regionGDP per capita in PPS

160

170

180

190

200


100

110

120

130

140

150

160

Finland Denmark Iceland Sweden Norway

2007

2008

2009

Sourc: Eurostat EU-27 average=100

Swedish consumers - high spenders

� High proportion of income spent on retail.

� Private consumption growth stronger than any other European country.

� Large middle income segment with high disposable incomes.

� Openness to new international concepts and brands.


� Openness to new international concepts and brands.

� Well-travelled consumers, always first with the latest, values quality, design and competetive prices.

� Acitvity-loving consumers – outdoor, home improvement, technology savvy, shopping is a spare time activity itself.

� World’s most advanced internet users – most buying decisions are taken online.

� Four distinct seasons creates demand for wide range of products

Strong retail growth2001-2007, percentage


Source: Economist Intelligence unit 2008

Retail sales growth 2006-2009

10,00%

15,00%

20,00%

USA


-10,00%

-5,00%

0,00%

5,00%

10,00%

2006 2007 2008 2009

USA

Denmark

EU (27)

Finland

Norway

Sweden

� Retail sales 50 billion EUR (2009)

� Growth 3.1%

� Retail sales 2010 Q1-Q3 strong: +3.7%

� Strong positive annual growth for 13 year,

Retail market overveiw 2009

50%17%

14%

January 20, 2011 www.investsweden.se11January 20, 2011

� Strong positive annual growth for 13 year,

average 4% per year.

� 50% of total household consumption

� Retail sales growth exceeds other EU

countries

� Ideal test market – demanding consumers

19%

Daily goods

Home/furnishing

Fashion

Leisure/Entertainment

Source: SCB

Strong growth in apparel segment

� 86 billion Euro

� Sales growth 75% during the last 10 years

� Women’s fashion 52% of total


value - most lucrative


€ 6 million

71%

€ 11million

13%

Source: SCB

10 largest clothing retailers in Sweden

Retailers StoresSales MSEK

2009 Change

%

H&M 161 7,881 5.9

Lindex 203 4,200 2.4

Varner Retail (Dressman, Cubus, Carlings, BikBok) 376 3,387 8.8

Kappahl 144 3,223 1.4

RNB Retail and Brands (Brothers & Sisters, Polarn o Pyret, NK, JC) 351 3.168 -8.7

Redcats Nordic (catalouge/distance selling, Ellos, La Redoute, etc) 3 3,000 0.0

MQ 102 1,730 -8.2

Gina Tricot 93 1,605 16.5

Bestsellers (Vero Moda, Vila, etc) 231 1,390 7.0

Indiska 63 804 3.1

Total 10 largest 1,727 30,390 2.5

Of Swedish originSweden is well known for it’s fashion wonder and sucessful retailers

expanding internationally

“Swedish consumers are the toughest in Europe and perhaps the world. They’re used to high standards and have high expectations. If you can win over Swedish consumers then you stand a good chance of being able to do so anywhere. “

A valued test market

Shaun Herbert, Managing director of advertising agency


Shaun Herbert, Managing director of advertising agency

DDB Stockholm and in charge of the McDonald’s

rebranding program

"Sweden is a technology savvy market. Swedes tend to be on the leading edge of adopting new technologies. We want to continue to drive that forward and use Sweden as a test market.”

Steve Ballmer, CEO Microsoft

Fashion, Spain

Fashion, Denmark

Fashion, UK

Increasing inflow of foreign retail chains

Fashion, Spain

Fashion, Spain


Fashion, UK

Fashion, Norway

Fashion, US Fashion, Germany

Fashion, US

Footware, Germany

Fashion, Spain

Fashion, Norway

Home funrnishing, Denmark

Eyeware, UK

Building & Construction, Germany

Toys, US

Toys, US

Increasing inflow of foreign retail chains

Furnitures, DK


Home electonics, Germany

Food, Germany

Food, Norway

Telecommunications, UK

Home electronics, Norway

Toys, US

Building & Construction, Finland

Supply - Expansion of retail space

� Expansion and renovation projects are ongoing –

1 million sqm. of retail floor space is planned until 2012.

� Slower paste in 2009

� Increase in international retail space ownership.

January 20, 2011 www.investsweden.se18 January 20, 2011

Mall of Scandinavia 100,000 sqm, Solna. Unibail Rodamco (UK)

Emporium65,000 sqm, Malmö. Steen & Ström (Norway)

Rents

Trends

� Weaker retailer demand, increased vacancies

� Increase in supply of retail space

� Prime location rents decreased in 2009 with approx. 9%


Terms

� Standard lease terms 3-5 years in shopping centers and high street,

7-10 in retail parks.

� Retail rents often partly based on turnover

� Compared to other EU countries tenants have a strong legal position.

Rent levels and consumption in larger EU cities

City Consumption Non-

food in city area

Quarter 1 2009

Prime High street

rent level/sqm/year

1 London € 6,174 million € 6,440


2 Paris € 5,879 million € 7,500

3 Rome € 5,762 million € 6,500

4 Madrid € 5,377 million € 2,640

5 Berlin € 5,080 million € 2,640

24 Copenhagen € 2,332 million € 2,000

26 Stockholm € 2,251 million € 1,230

Source: Jones Lang LaSalle and Experian

Franchising in Sweden is growing

Sales SEK Billion No of Franchisees No of Employees


Source: HUI, Swedish Retail Institute

Strong growth for distance selling

2,11 billion euro

+6,3 % *

49 billion euro

share: 4,5 % **

Total sales: 8,5 billion euro.

Average growth: 17,4 percent

2,65 billion euro

+12 % *

60 billion euro

share: 4,2 % **


Source: HUI

2,32 billion euro

+14,1 % *

44 billion euro

share: 5,2 % **

1,44 billion euro

+49,2 % *

36 billion euro

share: 4,0 % **

* = 2009 compared to 2008

** = Proportion of total retail trade

Strong growth in E-commerce and mail order

E-commerce sales up +15% 2009 in Sweden


2,2 billion EUR 4% of the total retail sales

Price and convenience drive distance selling

Less expensive(25 %)

Easier(22 %) Greater selection

(18 %)

Primary reason to shop from home

More convenient(21 %)

Saves time(10 %)

Don’t know

(3 %)


Primary reason to shop from home

Most popular products

24 %

1. Clothing

46 %

2. Home electronics 3. Books

39 %

Advanced IT infrastructure

4.

3.

2.

1.

Internet users

Sweden

Australia

Denmark

Iceland1. Sweden

2. US

3. Norway

4. Denmark

1. Iceland

2. Sweden

3. Norway

4. Denmark

5. Luxembourg


10.

9.

8.

7.

6.

5.

Canada

US

Japan

Finland

South Korea

Norway

25

5. Switzerland

6. Netherlands

7. Canada

8. Iceland

9. Finland

10. Australia

Source: IMD World Competitiveness yearbok 2010

5. Luxembourg

6. Singapore

7. Canada

8. Australia

9. Japan

10. Hong Kong

Shopping tourism increasesGenerates significant retail sales

� All time high, SEK 80 billion (EUR 8 billion)

� Since 2005 the retail sales to tourists has increased with 100%

� 31% of the total retail sales from tourism shopping (50%) from

international visitors.

� International tourism to Sweden increasing more than to the rest of � International tourism to Sweden increasing more than to the rest of

the world, +5%

� Cross-boarder shopping magnet

Natural logistics base


� National Investment Promotion Agency.

� Companies planning to establish operations or investing in Sweden can, free of charge, obtain information and assistance from ISA and its regional and international network.

� 80 professionals in Sweden, US, China, Japan and India has facilitated more than 1,000 investments during the last five years.

We help companies

worldwide to connect with

the best business

opportunities in Sweden


investments during the last five years.

� Establishment support and practical advice when setting up a business in Sweden.

� Information on business opportunities in Sweden

� Matchmaking with Swedish companies in key sectors.

� Location advice and contacts with business service providers.

www.investsweden.se


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Retail 2010 nov