Up to 40% retail may go out of business by 2030

Affected by booming online retailing, brick-and-mortar retailers will decline rapidly in the next ten years, the Finnish Commerce Federation forecasts recently.

The structure of the retail industry is changing and the trend will hit brick-and-mortar stores hard, said the federation.

Even though the turnover of the industry has increased over the past few years, the growth might not continue and will start to decrease in the next couple of years, it added.

According to the industry outlook conducted by the federation, over 20 percent of retail stores will go out of business in Finland, and the ratio could run up to 40 percent at worst.

The reason behind the tendency is the rapid growth of online stores. Foreign online stores are the biggest threat to physical stores in Finland. The situation is almost the same as in its neighboring country Sweden.

"Not surprisingly, Sweden dreads that Chinese e-commerce and Amazon entry into the Nordic countries," said Jaana Kurjenoja, chief economist at the Finnish Commerce Federation.

Mari Kiviniemi, managing director of the Federation, said that restructuring of the industry and the digital revolution have been long talked about, now the change is more tangible both in reality and forecasts.

This needs to be taken into account more seriously in Finnish national and EU -level decision-making, added Kiviniemi.

The organization is concerned about the potential of the retail industry to provide jobs in the future, as the industry is the largest employer in Finland, accounting for 11.5 percent of the country's total employment. However, as an industry, it is wrestling in a very intense international competition.

To survive in the fierce competition, the domestic retail sector should not be subject to additional obligations or regulations, which do not apply to foreign ones. Monopolies should also be dismantled, in order to improve the efficiency of the sector, suggested the federation.

In addition, the cost burden should not be increased by, for example, various taxes or additional regulations. In addition, access to labor market needs to be ensured and labor migration should be increased.