The North is flourishing again

Full of colour and variety – perhaps not the first words that come to mind when you think of the Nordic countries (especially in the middle of winter). And yet anyone with an interest in the DIY and garden market – yes, since last year there is even one garden centre in existence north of the Arctic circle, as we report elsewhere in this issue – will discover a varied and flourishing DIY retail landscape in these countries. At first glance the outward conditions do not appear particularly favourable for retailers. Large, thinly populated expanses, long transport routes and the accompanying high logistical costs can quickly turn into pressure on the margins – or, alternatively, to a challenge to find a solution to such problems. Last summer a group of visitors from the German DIY scene were astonished to note that making deliveries by helicopter is nothing exceptional. On the other hand, this is a region with highly developed markets. Only in the area of garden-ing is there perhaps some catching up still to be done when compared with the region’s neighbours to the south. These countries are consistently attractive to retailers because their citizens are well-off. In 2009, the year of financial crisis, the per-capita GDP in oil-producing Norway was double the level in Germany or France, for example. Moreover, the Danes, Swedes and Finns also achieve better economic indicators than most other Europeans This doesn’t mean that the crisis has simply passed the far north by. The rate of unemployment in Sweden and Finland nudged the ten per cent mark, and reached eight per cent in Denmark; only Norway managed to keep it below four per cent. However, consumer confidence accelerated again sooner here than elsewhere, namely in the spring of 2009, and has remained above the average for the European Union since then, as the market research company Mintel emphasizes. Sweden, Finland and Denmark reported the highest levels of consumer confidence across the EU in September 2010. That does nothing to alter the fact that even the Scandinavians have had to slow down, which means not least that spending on their homes and gardens has suffered as well. Nevertheless, it is long since the economic horizon in the North showed signs of brightening up once more: Mintel forecasts appreciable annual rates of growth for the Nordic DIY markets, some of them approaching double digits. Rainer Strnad Managing editor Download: