Swedish retail sales in 2015 flourished in almost all of the municipalities in the country. Both household purchasing power and the Swedish population increased, and record retail sales followed. New figures from the Retail in Sweden database show that retail sales increased in 269 of Sweden’s 290 municipalities. Thirteen municipalities showed unchanged sales, and only nine municipalities showed a decrease in sales. This means that 93 per cent of the municipalities showed positive sales growth and no more than 3 per cent had lower sales. This can be compared to the previous year (2014) when 63 municipalities, or 22 per cent, showed a decrease in retail sales.

Some of the factors in 2015 that prompted Swedes to spend more than previously on retail trade consumption include low interest rates, weak inflation, high level of savings, tax-deductions for domestic service work on homes and an increased level of employment. Sales were also positively impacted by a growing population, which derived both from the rising number of newborns and the large number of newly arrived refugees. The situation for retail trade companies, however, is more complex. Despite increased sales, profitability is still strained. Expenses for leases, salaries and purchases, for example, have risen, which increased sales can only partially compensate. Retailers also have to implement streamlining and cost savings in order to survive.

According to Retail in Sweden, Stockholm Municipality had the highest sales in the country in 2015. Sales reached SEK 69 billion, which corresponds to just over a tenth of the entire country’s sales. When looking from a wider perspective, the three largest municipalities – Stockholm, Gothenburg and Malmö – represent 21 per cent of sales in the country, while the ten largest municipalities from the standpoint of sales represent one-third of retail sales.

Tanum’s municipality showed the strongest development (Västra Götaland County) with growth of 47 per cent, which corresponds to an increase of over SEK 500 million. Solna and Järfälla Municipalities (Stockholm County) had growth of 13 respectively 12 per cent, which corresponds to over SEK 400 million respectively SEK 900 million.

Among the counties in Sweden, Stockholm County did the best with strong growth of 6 per cent. Five of the ten municipalities with 50,000-250,000 inhabitants and which had the strongest development are located in the Stockholm area. Retail in these municipalities is in an expansion phase with a strong growth of attractive stores such as ICA Maxi. Overall, most of the counties showed stable and positive development of between 4 and 5 per cent. Development in Dalarna County was the weakest at 3 per cent.

Retail in Sweden also presents a sales index whereby retail sales in each municipality are placed in relation to population. The sales index describes how well retail utilises the population’s purchasing power and if it can attract customers from areas outside its own municipality. An index over 100 means that retail attracts customers from other areas, and an index under 100 means that retail has an outflow to other municipalities. Strong border shopping such as in Eda, Årjäng and Strömstad gives an index as high as in municipalities that have an IKEA store. Other factors underlying a high index include large retail hubs in the form of external shopping centres or stores such as Gekås in Ullared that draw customers. Low indexes are frequently found in inland municipalities where a high percentage of the population works in a different municipality. Nordanstig, for example, has an index of 40.

Conditions for retail trade in 2016 have continued to be favourable, but there is concern as regards the possibility of continued strong growth due to the new amortisation requirement for mortgages, the lower tax-deduction for domestic service work on homes from the beginning of the year, tax increases and a sluggish labour market for new arrivals to Sweden. In the long term, retail trade can most likely look forward to a soft landing since purchasing power is currently at a very high level and will have difficulty growing much more. Higher interest rates, higher inflation that results in lower real wages and an uncertain labour market can potentially dampen the attractiveness of retail trade.

Retail in Sweden is the only database of its kind. It provides key figures in relation to the size and development of retail trade in Sweden’s counties and municipalities. Retail in Sweden is produced by HUI, and is funded by The Swedish Retail and Wholesale Council. The material can be downloaded free of charge at www.handelnisverige.se. The figures can be used, for example, for start-up analyses and decisions, follow-up, benchmarking and strategy work in retail trade.