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Retail

Norwegian Cross Border Trade Plummets 87.5% Due To COVID-19

Norwegian consumers spent 87.5% less in Sweden last year, as COVID-19 restrictions led to cross-border trade being decimated, new data has shown.

According to a report by HUI Research in association with retail representative group Svensk Handel, cross-border trade between Norway and Sweden increased by SEK 2.3 billion (€220 million) between 2017 and 2019, to be valued at SEK 27.9 billion (€2.72 billion), before the pandemic struck.

The report also states that some 7,200 jobs were created in Sweden as a result of this cross-border trade.

The slump in cross-border trade impacted some parts of Sweden more than others – in Värmland, cross-border trade was valued at SEK 6.1 billion before the pandemic, while in the town of Eda, where the popular Charlottenburg shopping centre is located, a quarter of the workforce are employed in the retail sector.

Some businesses have seen turnover drop by as much as 95% as a result of the drop in cross-border trade, Svensk Handel said.

'Painful Reminder'

"The coronavirus pandemic has painfully reminded us of the importance of cross-border trade, not only for trade but for entire local communities," commented Stina Höök, chairman of the regional development committee in Värmland.

"Great economic and social values ​​are at stake. Cross-border trade disappeared overnight, and the situation is serious."

Elsewhere, in Västra Götaland, where cross-border trade was worth SEK 9.4 billion in 2019, some 2,000 people are employed in the retail sector, while cross-border business is also of key importance to the hotel and restaurant sector.

"Border trade is a decisive factor for growth and jobs throughout Sweden," said Kristina Jonäng, chair of the regional development committee in the Västra Götaland region.

"Companies need urgent help to survive the crisis, but we must also work long-term with skills development, infrastructure and sustainability to take full advantage of the income generated by cooperation at the border."

'Nordic Cooperation'

Svensk Handel said that the pandemic has illustrated that 'Nordic cooperation has not worked' when it comes to maintaining good business relations between Norway and Sweden, and the current crisis should serve as a 'lesson for the future'.

In 2019, cross-border trade generated SEK 6.5 billion in tax revenue, it added.

In January, the Norwegian government's trade and industry committee announced plans to issue a permanent border trade barometer by 1 July, which will seek to reduce border trade to strengthen competitiveness in Norwegian businesses and industries.

© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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