Market Monitor - Consumer durables - Sweden

Market Monitor

  • Sweden
  • Consumer Durables

1st April 2015

In 2015, Sweden expects a modest growth in the consumer durables retail segment.

Market performance snapshots

Sweden

  • A transformation of the retail sector is underway
  • Higher-risk sector despite decreasing insolvencies
  • High-street retailers face problems

The Swedish consumer durables retail sector grew about 2% in the last five years, more or less in line with national GDP growth. Larger growth rates were recorded for the online retail sector, including major players such as Dustin, NetOnNet, CDon. In contrast, brick-and-mortar retailers often recorded weak or even negative growth. In 2015, just a modest growth increase in the consumer durables retail segment is expected.

Beside the growing market share of online retail, another trend is the concentration of retail stores in large, newly-built and car-accessible malls close to Swedish cities, often financed through public-private partnership ventures. This has led to retail overcapacities in some places, with customers going away from traditional high-street retailers in the city centres. As a consequence, the number of those traditional players continues to decrease. Meanwhile, the costs of new building projects have forced landlords to increase rents for subletting retailers to compensate, which puts additional financial pressure on affected businesses.

Between January and November 2014, the number of insolvencies in the retail sector decreased 23% year-on-year, from 800 to 617 cases. However, this was in line with the development in all Swedish industries, and the insolvency level remains high compared to other sectors: retail insolvency exposure is the second highest in the country (at 1.13%) behind hotels and restaurants. While insolvencies are expected to decrease further, the number of businesses active in retail is decreasing. Insolvencies outnumber new foundations, which also points to on-going challenges in this industry.

Our underwriting stance for consumer durables retail is mildly cautious. Newly founded businesses, in particular, face higher risks in the highly competitive market. The same accounts for brick-and-mortar high-street retailers and subsectors with capital tied to inventory, such as kitchen, furniture and boat retail. Online retailers generally face good business prospects, as there are still growth opportunities in segments with low market penetration. Swedes increasingly embrace shopping online, and the online segment is expected to continue to grow in the years ahead. The dual effect of growing e-commerce and relocation of stores in large shopping malls out of towns will continue to shape the transformation of the Swedish consumer durables retail sector.

 

Related documents

Disclaimer

Each publication available on or from our websites, such as, but not limited to webpages, reports, articles, publications, tips and helpful content, trading briefs, infographics, videos (each a “Publication”) is provided for information purposes only and is not intended as a recommendation or advice as to particular transactions, investments or strategies in any way to any reader. Readers must make their own independent decisions, commercial or otherwise, regarding the information provided. While we have made every attempt to ensure that the information contained in any Publication has been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in any Publication is provided ’as is’, with no guarantee of completeness, accuracy, timeliness or of the results obtained from its use, and without warranty of any kind, express or implied. In no event will Atradius, its related partnerships or corporations, or the partners, agents or employees thereof, be liable to you or anyone else for any decision made or action taken in reliance on the information in any Publication, or for any loss of opportunity, loss of profit, loss of production, loss of business or indirect losses, special or similar damages of any kind, even if advised of the possibility of such losses or damages.