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Swedish Market Insight, Autumn 2020

Welcome to the new COVID-19 rollercoaster, you’ve all got a free ticket, and no one knows if it goes to heaven or hell. By Patrik Lundin

No one knew what to expect in February/March, however writing this in October, it feels as though we are right back to where we started with a fast increase of new COVID-19 cases in most countries around Europe. Sweden is no exception. Let’s hope for less deaths in the 2nd wave!

Well, last winter, Sweden saw a pretty exceptional lack of snowfall, with big parts of the country seeing no snow. There were a lot of smaller resorts that never opened at the same time last year either, while bookings at the bigger resorts were heading towards a record year. Then came February. We all started reading about the situation in Central Europe and how the ski resorts there were closing one by one. I think we were lucky up here in Sweden because ski resort closures did not start happening until the end of March, beginning of April. This delay gave the shops another month or so to sell products and shift more stock.

I spoke to Magnus Noppa at Kläppen ski resort, also known for its insanely good ski/snowboard park where Swedish rockstars practise their double and triples before going international. Kläppen ski resort were going for a record season before bookings started being cancelled around mid-March; and then, just before the Easter holiday, the resort had to close. In the end, turnover went the wrong way compared to the year before.

As you might have read, Sweden had a different approach to COVID-19 to the rest of the world. No lockdown, no super hard restrictions, and so on. We have definitely had a pretty easy time compared to many other countries, but our way of living has changed dramatically for sure. The people that could work from home worked from home; restaurants, cinemas, sport events have to follow restrictions that allow “only 50 people”. But, the most important part of our approach has been that everybody respects the wash your hands, stay home if you feel sick and keep distance from other people rules that the Public Health Authorities continue to tell us daily in the TV news.

So, what happened in the stores and how did the government help businesses to survive? I had to use the help offered by the government myself since the demand for snowboard rentals decreased heavily compared to last winter. For me and my staff, I did 60% furlough for 3 months until we returned to full-time again. In my case, it took 5 days from sending in the info to receiving the furlough money in my company account. After 3 months, I had to inform them of changes in our working hours. Even now, after 7 months, companies are still having to rely on this support. Working together with landlords, the government is also helping out by reducing the rents of companies that have been most affected by 50%. If you own your own apartment or house, until August next year, you don’t need amortise your loan with the banks.

After winter came spring and everybody was shaken up as customers just stopped buying everything, except for toilet paper (are they planning to shit themselves to death or what!?) and food.

Andreas at the Vans skate & snow shop, Brädkultur  https://www.bradkultur.se based in the heart of Stockholm, told me that this has been the craziest spring/summer ever. From a big decrease in March/April across all product groups, the skateboards hardgoods started to move fast. Faster than fast. With an increase of 100-200% each month during the summer, unfortunately the skateboard hardgoods boom did not help the recovery of soft goods and shoe sales which had also decreased significantly during the same period. Andreas says that without the skateboards, his shop would’ve had a very bad summer.

I called up Jörgen, at 08 Distribution https://www.nollattadist.se, the largest skateboard distributor in Sweden, to check how daily life has been since last spring and talk about the skateboard craziness rumours. With brands like Independent, Spitfire, Thrasher, and 25+ more brands they sure know their skateboarding stuff. Jörgen told me that not everything has been sunshine and rainbows. The pre-orders for spring were delivered on time and 08 always has a decent stock. In April, the reorders started to explode, and the stock emptied out way faster than expected. The problem? 08 Distribution usually fill up their warehouse during summer, but this summer, they’ve found it almost impossible to get more products from the suppliers, which subsequently, had affected business.

E-commerce, e-commerce, e-commerce. Q2 was +49% compared to last year and it has continued into Q3, even if the increase has been a more modest 30% increase. People who know e-com and digitalisation say that we have jumped forward 3 years in both digitalisation behaviour and peoples attitudes towards e-com; people now choose e-com as their primary shopping channel.

So, with a crazy boom in skateboard sales, what happened with the water products?

Markus Boman, at Surfers https://surfers.se in Varberg, has a big smile on his face. With more than 30 years’ experience, Surfers has become one of the biggest surf shops in Scandinavia. On top of being a surf shop, they are also the distributor for Rip Curl wetsuits, Firewire, Fanatic and more. They also have their own surf centre by the beach.

They went from furloughing their staff in March to hiring extra staff due to 2020 turning into the best season in history. The surf/kite courses at the surf centre have been close to fully booked for the whole summer and the sales in all product categories have been very good. On top of that, July, which is our summer holiday month, was very windy. “We had a hard time getting enough products”, Markus said. “This season will probably end on a +25% compared to last season.”

Now it’s October and we’re getting closer to winter. What will happen this year? Times will be shaky but interesting. On a positive note for Swedish ski resorts, winter attendees will be mostly Swedish people, with some exception for our Danish friends. When I talked to the resorts, they’re very motivated for this season and so far, the bookings look amazing. Christmas and New Year are important everywhere and the Swedish resorts currently have +20% more bookings compared to last year and it seems like the bookings across the other big holidays are looking better than previous years.

Let’s hope that the end of the rollercoaster can be seen soon and never finds the track to hell.

Stay safe.