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Record retail sales in Denmark after post-lockdown ‘ketchup effect’

Sales of shoes and clothes Denmark leapt by close to 100 percent in May in what the Danish Chamber of Commerce is describing as a post-coronavirus "ketchup effect".

Record retail sales in Denmark after post-lockdown 'ketchup effect'
Danes have been buying shoes like they're going out of fashion (which these Moshi Moshi shoes from 2008 clearly are). Photo: Jan Jørgensen/Ritzau Scanpix
According to Statistics Denmark, retail sales overall rose 9.4 percent in the month after shopping malls were reopened, hitting a new record after the largest month-on-month increase since it first started reporting retail statistics at the start of the year 2000. 
 
“This is of course positive and clearly shows that the Danes have had the courage to increase consumption as the reopening takes place,” said Tore Stramer, chief economist at the chamber, in a press statement
 
“However, it must be borne in mind that there has been a saving in consumption that has been let loose in May. So we are also seeing a ketchup effect in consumption.” 
 
READ ALSO: 
 
Denmark's government shut down all shopping malls in the country in mid-March, with most high street shops also closing their doors until the restrictions were relaxed on May 11. 
 
 
The surge in sales will make up for some of the financial hit taken by Danish retailers during the lockdown, indicating that profits for the year might be less affected than feared. 
 
But Stramer warned that higher unemployment and a fall in Danish exports would continue to drag on Denmark's economy over the rest of the year, meaning May's bumper sales were unlikely to continue. 

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SHOPPING

‘Harryhandel’: Is the return of cross-border shopping in Norway really a good thing? 

The pandemic cut-off Norway from its neighbours, putting a temporary end to border shopping. Now ‘harryhandel’ trips are allowed again businesses in the country fear they will lose out as shoppers look abroad for cheaper groceries. 

Pictured is Norway and Sweden's border on the old Svinesund bridge.
Will the return of border shopping have a negative affect on the country? Pictured is Norway and Sweden's border on the old Svinesund bridge. Photo by Petter Bernsten/AFP.

In eastern Norway, particularly along the border with Sweden, cross-border shopping has long been common for residents looking for cheaper groceries and a better selection of products. 

Norway’s Covid-19 rules effectively put a stop to that until this summer. The closed border meant a record year for food and beverage sales in Norway. 

“Due to the fact that there was little action and that people did not travel, we noticed that our sales increased greatly during the entire period,” Øyvind Berg, production manager at Norwegian dairy firm Synnøve Finden, explained to public broadcaster NRK.

Now producers and supermarkets fear the impact of cross-border shopping being up and running again. 

“Our challenge is that we see that more than half of the food and beverage producers, i.e. the industrial companies, fear that they will lose market share because cross-border trade will return in full,” Petter Brubakk, director of food and beverage at the Confederation of Norwegian Enterprise (NHO), informed NRK. 

The majority of those who go shopping across borders in Norway will do so in Sweden. However, in the north, some will also venture into Finland or Russia.

Further south people will also travel to Germany or Denmark. 

Why do people go to other countries for shopping? 

Overall the main appeal of cross-border shopping is that its much better for consumers than shopping domestically. 

Norway’s EEA agreement with the EU means that most foods, drinks, tobacco products, alcohol and other agricultural products are more expensive than they are within the EU as custom duties are required to import them into Norwegian supermarkets. 

Not just that, but there is a much wider selection of products than in Norway due to laws that protect Norwegian products. For example, cheeses such as Cheddar are more readily available, cheaper and generally of better quality in other countries than those found in Norway. 

READ MORE: What is ‘harryhandel’, and why do Norwegians love it so much?

Is border shopping a bad thing for Norway?

Norwegian businesses argue that crossing the border to shop affects the whole value chain, negatively impacting everyone from Norwegian farms and producers to supermarket employees, not just companies profit margins. 

“My advice is to encourage Norwegians to buy Norwegian food, and help secure Norwegian jobs throughout the value chain,” food and agriculture minister Sandra Borch told NRK. 

In addition, shopping domestically means more tax revenue for the Norwegian system to use to fund its generous welfare state. 

While shopping domestically protects domestic jobs, shopping abroad protects jobs there, which rely on people hopping the border to get their groceries. 

Coronavirus pandemic restrictions left a black hole in some of these economies reliant on shoppers from the Norwegian side of the border. For example, in Strömstad, a Swedish town close to the border where many travel to shop, unemployment rose by around 75 percent after Norway closed its borders with Sweden. 

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