Long way to the shop – or not?

– Structural change in the daily consumer goods retail trade in Finland 2003–2005

Abstract

The research project entitled Long way to the shop – or not? – Structural change in the daily consumer goods retail trade in Finland 2003-2005 examines the changes occurred in the grocery retail network and their causal factors. The study investigates how the range of grocery store services has changed in different parts of the country, and whether regional service vacuums have been created, with not one daily goods shop. The structure of the daily goods retail network and the changes that have taken place are compared particularly to the demographic structure and its regional changes.

About three hundred new grocery stores opened across the country during the study period. At the same time, almost two hundred closed down, making the growth of store numbers a good hundred. The growth of daily consumer goods stores was concentrated in towns and cities in Southern and Western Finland, and particularly the fringes of built-up areas. Nearly half of the growth was consisted of so called covenience stores. The numbers of daily consumer goods retailers declined slightly in the sparsely populated areas of the provinces of Southern Finland, Oulu and Lapland. Nevertheless, the decline of shops in sparsely populated areas has clearly slowed down in comparison to former trends. The increase in grocery store numbers mostly concerned small shops of under 400m2, with an increase of just over a hundred. The number of small shops grew only in the urbanised municipalities of the provinces of Southern and Western Finland. There was a distinct decline of supermarkets of over 400 m2 in the province of Southern Finland, but their number increased slightly in the rest of the country.

Availability of grocery stores has deteriorated, especially in sparsely populated areas situated a long way from main highways. Approximately 227,000 people lived in sparsely populated areas with no shop, while about 5,200 residents lived in built-up areas with not a single grocery store in 2005. The total number of people living in areas with no shop grew by about 15 percent during the study period. The daily consumer goods retail network and the changes it has undergone reflect the changes in demographic and regional structure. Population and job numbers in municipalities, accumulations of purchasing power and tax revenues, as well as migration and commuting within municipalities, were the best indicators of daily consumer goods retailers and floor areas and their changes. The larger the municipality and the more rapidly its population was concentrated in built-up areas, the higher the number of grocery stores and the more rapidly their number grew. A high degree of self-sufficiency in terms of jobs and the resulting low levels of commuting to neighbouring municipalities improved the chances of a viable store. Summer populations also had a positive effect on preserving the operational preconditions of shops in sparsely populated areas.

However, store numbers did not always change in proportion to population numbers. The numbers of daily consumer goods retailers grew the most in central municipalities of large and fast-growing conurbations. Conversely, in the municipalities surrounding conurbations, the population grew proportionally faster than the number of grocery stores. In rural municipalities, grocery store numbers declined proportionally more than the population. Especially in the sparsely populated areas of the provinces of Southern Finland, Oulu and Lapland, grocery store numbers declined faster than the populations.

Current restrictions on Sunday opening hours would seem to be working in favour of availability and accessibility of daily consumer goods stores. The Opening Hours Act was intended to boost the competitive position of small shops in relation to large stores, as well as kiosks and service station shops. In addition, the investment subsidies awarded in 2004-2006 to secure operation of village stores in sparsely populated areas have been instrumental in slowing down the concentration trend of the daily consumer goods trade.

Hannu Kytö, Jenni Väliniemi. Long way to the shop – or not? – Structural change in the daily consumer goods retail trade in Finland 2003–2005. Publications 3/2007.

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