Wintry weather helping clothing and footwear retailers' January sales
Post-holiday sales at industrial goods stores are drawing as many shoppers as last year, but weather gear, sports goods and clothing are selling better.
January is traditionally a discount season in retail and this year is no different.
Guido Pärnits, director of the Ülemiste Keskus shopping center, told ERR that sales during this year's January discounts are stable compared with the same time last year. However, stores have benefited from the cold and snowy weather that arrived around New Year's.
"Right now, the most important factor is the weather. Now that there's snow on the ground and winter has arrived, stores selling weather-related goods — footwear, sporting goods, clothing — are doing fairly well," said Pärnits. He added that sales at Ülemiste's fashion, sportswear and shoe stores are expected to be solid, though the discounts themselves haven't stirred much excitement among shoppers.
According to Pärnits, those in the apparel business have observed that people often browse in-store but wait for sales to make purchases, even at the risk of missing out on items they want rather than paying full price.
"People are definitely looking for discounts and they're more cautious with money than during better times, but there's never been a January shopping boom," Pärnits said.
Erkki Laugus, management board member at Kaubamaja AS, said their situation is broadly similar to last year's, though there are signs of a slight positive trend. Kaubamaja is also running sales campaigns, with a focus on fashion items.
"The winter season is now at its peak and seasonal products continue to sell well because of that," Laugus said, adding that their customers are primarily interested in high-quality goods at attractive prices. "Such products tend to sell out quickly."
Marta Palm, purchasing manager at Rimi Eesti, said industrial goods sales at Rimi stores have seen a slight decline, likely due more to shoppers choosing international online stores than to reduced purchasing power.
"This trend is most noticeable in our hypermarkets where the selection of industrial goods is also the widest," Palm added. "Among product categories, seasonal and weather-related goods, such as hats, scarves, gloves, sleds and car accessories, have been least affected."
Marju Ridamäe, head of the Kristiine Keskus mall, noted that their visitor numbers have remained stable in January, though more detailed sales figures are not yet available.
"I believe sales volumes for industrial goods will be about the same as in January of last year," Ridamäe added.
Chinese online stores a cause for concern
According to the Estonian E-Commerce Association, over 80 percent of small parcels ordered in the EU in 2024 came from China — a fivefold increase in just a few years. A similar trend is visible in Estonia.
Ülemiste Keskus director Guido Pärnits said the widespread ordering from Temu and other low-cost Chinese online retailers is troubling for Estonian merchants, calling it unfair competition that most strongly affects smaller shops.
"It's a brutal situation and I sincerely hope the Europe-wide plans to impose additional taxes or other forms of regulation on these goods will eventually be implemented," Pärnits said.
Comparing this January to the same period last year, Pärnits said there haven't been major drops in store sales and that, so far, trends remain positive. Still, he noted that local factors, like Rail Baltica construction near Ülemiste or roadworks around other malls, continue to influence performance.
As of January, an increase in the basic tax exemption is expected to boost the take-home pay of some employees.
Erkki Laugus said it's still too early to draw firm conclusions about how this might affect consumer behavior and that it's premature to comment on its impact on retail trends.
Pärnits believes the tax change will have a positive effect on retail. He noted that when people are left with more money in hand, their mood improves, which may in turn encourage greater spending.
"The real problem in Estonia was that, amid all the noise and exaggeration surrounding the VAT hike, consumer confidence took a serious hit," he said.
Pärnits added that by December, consumer confidence had already been rising for four straight months and is likely to keep climbing. He also pointed out that macroeconomic forecasts have clearly improved. The main concern now is recovery among Estonia's export partners, though Pärnits said he remains hopeful each year that things will improve.
"The difficult situation has dragged on for a long time due to various factors. Crises are nothing new, but this period has been unusually long — Russia's war in Ukraine, COVID, rising energy prices — all of it has delayed the expected rebound," the retail executive said.
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Editor: Marcus Turovski
