A presentation about the Swedish Retail market by Invest Sweden.

1. The retail market in Sweden
Steady growth and demand for new concepts
January 20, 2011
January 20, 2011 1 www.isa.se
www.investsweden.se

2. 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
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.
January 20, 2011 2 www.investsweden.se

3. 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
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
January 20, 2011 3 www.investsweden.se

4. Strong and stable economy
GDP growth Inflation rate
1997–2011, average annual change, percent 1997-2011, annual average, percent
Spain 2.7 Netherlands 2.1
Finland 2.7 Italy 2.1
Norway 2
Sweden 2.4
Great Britain 1.9
Great Britain 2.1
Denmark 1.9
Netherlands 2.1
Belgium 1.8
Austria 2
Sweden 1.7
Norway 1.9 Finland 1.7
France 1.8 Austria 1.6
Belgium 1.8 France 1.6
Denmark 1.3 Germany 1.4
Source: National Institute of Economic Research Eurostat; OECD, 2008 Source: National Institute of Economic Research Eurostat; OECD, 2008
(Figures for 2008 are preliminary)
January 20, 2011 4 www.investsweden.se

5. 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
January 20, 2011 5 www.investsweden.se

6. People are wealthy …
Sweden
GDP 280,983 billion EUR
30,000 euro per capita
Denmark
GDP 163,677 billion EUR
29,700 EUR per capita
Finland
GDP 153,612 billion EUR
28,900 euro per capita
Norway
GDP 231,736 billion EUR
GDP = Gross Domestic
product 2008
47,700 EUR per capita
Source: Nordic Statistical
Yearbook 2009
January 20, 2011 6 www.investsweden.se

7. Strong purchasing power in the region
GDP per capita in PPS
200
190
180
170
160
2007
150 2008
2009
140
130
120
110
100
Finland Denmark Iceland Sweden Norway
Sourc: Eurostat EU-27 average=100
January 20, 2011 7 www.investsweden.se

8. 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.
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
January 20, 2011 8 www.investsweden.se

9. Strong retail growth
2001-2007, percentage
Source: Economist Intelligence unit 2008
January 20, 2011 9 www.investsweden.se

10. Retail sales growth 2006-2009
20,00%
15,00%
USA
10,00%
Denmark
EU (27)
5,00%
Finland
Norway
0,00%
Sweden
2006 2007 2008 2009
-5,00%
-10,00%
January 20, 2011 10 www.investsweden.se

11. Retail market overveiw 2009
14%
Retail sales 50 billion EUR (2009)
Growth 3.1%
17%
Retail sales 2010 Q1-Q3 strong: +3.7% 50%
Strong positive annual growth for 13 year,
average 4% per year.
50% of total household consumption 19%
Retail sales growth exceeds other EU
countries Daily goods
Ideal test market – demanding consumers Home/furnishing
Fashion
Leisure/Entertainment
Source: SCB
January 20, 2011 11 www.investsweden.se

12. 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
€ 11million
13% € 6 million
71%
Source: SCB
January 20, 2011 12 www.investsweden.se

13. 10 largest clothing retailers in Sweden
Sales MSEK Change
Retailers Stores 2009 %
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

14. Of Swedish origin
Sweden is well known for it’s fashion wonder and sucessful retailers
expanding internationally

15. A valued test market
“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. “
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
January 20, 2011 15 www.investsweden.se

16. Increasing inflow of foreign retail chains
Fashion, Spain
Fashion, Spain
Fashion, Denmark
Fashion, Spain
Fashion, UK
Footware, Germany
Fashion, Norway
Fashion, Spain
Fashion, US
Fashion, Norway
Fashion, US Fashion, Germany
January 20, 2011 16 www.investsweden.se

17. Increasing inflow of foreign retail chains
Home funrnishing, Denmark
Eyeware, UK
Furnitures, DK
Toys, US
Building & Construction,
Germany
Toys, US
Building & Construction,
Finland
Food, Norway Home electonics, Germany
Food, Germany Home electronics, Norway
Telecommunications, UK
January 20, 2011 17 www.investsweden.se

18. 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.
Mall of Scandinavia Emporium
100,000 sqm, Solna. Unibail Rodamco (UK) 65,000 sqm, Malmö. Steen & Ström (Norway)
January 20, 2011 18 www.investsweden.se
January 20, 2011

19. 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.
January 20, 2011 19 www.investsweden.se

20. Rent levels and consumption in larger
EU cities
City Consumption Non- Quarter 1 2009
food in city area 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
January 20, 2011 20 www.investsweden.se

21. Franchising in Sweden is growing
Sales SEK Billion No of Franchisees No of Employees
Source: HUI, Swedish Retail Institute
January 20, 2011 21 www.investsweden.se

22. Strong growth for distance selling
Total sales: 8,5 billion euro.
Average growth: 17,4 percent
2,11 billion euro 2,65 billion euro
+6,3 % * +12 % *
49 billion euro 60 billion euro
share: 4,5 % ** share: 4,2 % **
2,32 billion euro 1,44 billion euro
+14,1 % * +49,2 % *
44 billion euro 36 billion euro
share: 5,2 % ** share: 4,0 % **
* = 2009 compared to 2008
Source: HUI
** = Proportion of total retail trade
January 20, 2011 22 www.investsweden.se

23. 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
January 20, 2011 23 www.investsweden.se

24. Price and convenience drive distance selling
Easier
Less expensive (22 %) More convenient Greater selection Saves time
(25 %) (21 %) (18 %) (10 %)
Don’t know
(3 %)
Primary reason to shop from home
Most popular products
46 % 39 %
24 %
1. Clothing 2. Home electronics 3. Books
January 20, 2011 24 www.investsweden.se

25. Advanced IT infrastructure
Internet users
1. Sweden 1. Iceland
1. Iceland
2. US 2. Sweden
2. Sweden
3. Norway 3. Norway
3. Denmark
4. Denmark 4. Denmark
4. Australia
5. Switzerland 5. Luxembourg
5. Norway
6. Netherlands 6. 6.South Korea
Singapore
7. Canada 7. 7.Finland
Canada
8. Iceland 8. 8.Japan
Australia
9. 9.US Japan
9. Finland
10. 10. Hong Kong
Canada
10. Australia
Source: IMD World Competitiveness yearbok 2010
January 20, 2011 25 www.investsweden.se

26. Shopping tourism increases
Generates 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
the world, +5%
Cross-boarder shopping magnet

27. Natural logistics base
January 20, 2011 27 www.investsweden.se

28. National Investment Promotion Agency.
We help companies
Companies planning to establish operations or worldwide to connect with
investing in Sweden can, free of charge, obtain the best business
information and assistance from ISA and its opportunities in Sweden
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.
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
January 20, 2011 28 www.investsweden.se

29. January 20, 2011 29 www.investsweden.se