03.08.2011
The devil is in the retail
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| News2biz Senior editor |
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I have spent the better part of my summer holiday at my holiday home in Saaremaa and like every post euro reform visitor to Estonia I had to get used to the myriad of copper and brass coins that have replaced the myriad of ridiculously-low denomination kroon bank notes. At least the maintenance cost of the new currency will be lower - or so it should be - because small bills have a lifetime of down to six months while coins last for decades.
However, it is possible that the currency system is the only thing that will get cheaper, because as a lot of other visitors I too have noticed how expensive Estonia has become. I am not talking about the price of a hotel bed, a rental car or a beer on the Town Hall Square, no; I refer to prices in regular retail outlets, visited in bulk by regular Estonians.
This summer, increasing prices was yet again a favourite topic in the press and among Estonians. And for once it was not some old-timer reminiscing about the Brezhnev days when he could feed his cow on subsidised rye bread - I noticed myself that when I did my weekly shopping at the ICA-owned Rimi supermarket in Kuressaare the total sum was similar or even higher than what I usually pay at my local ICA supermarket back in Sweden. It makes you wonder how ordinary Estonians make ends meet.
An old student friend of my wife's, who works as a manager for Tallink and travels frequently between Estonia, Finland and Sweden, has found her own solution to the problem of high Estonian food prices. She, who makes a very decent salary by Estonian standards, buys her groceries in Helsinki or Stockholm and takes them with her to Estonia.
A favourite subject for the press during the dull summer months when ripe garden berries have to be transformed into syrup or jam has always been the price of sugar. However, this year the white powder is genuinely worth the attention because, according to the local press, the retail price for sugar in Estonia has set a European record. A reasonable conclusion is that for some reason market mechanisms do not work - or is it a special post-soviet on international products imported into Estonia?
Selver, the supermarket arm of the Estonian Tallinna Kaubamaja chain, according to a source of mine, has been so affected by a self-perceived image as the most expensive of the retail chains that it has introduced Crazy Days and chucked its aisles full of discount merchandise to draw the masses in. It had the opposite effect on me - after being a loyal and happy customers of Kuressaare's Selver shop since its opening in 2002, I abandoned it in favour of the more spacious Rimi. I will not shop in a shop where two shopping cars cannot pass each other in the main aisle.
Being a regular visitor to Estonia since 1989, I have made some observations regarding Estonian retail. Here is a selection:
International brand clothing or shoes have always been expensive. They still are.
Novelties are very expensive and remain so for a while until a given time where they are integrated into what is perceived as the standard Estonian retail selection. I have observed this for foreign alcohol brands, tetrapacked juice and paper diapers during the nineties. The pricey novelty this summer was when my son of 13 wanted to hire a Segway. EUR 5 for 10 minutes!
I had to give my passport and driver's license number and fill out a formal rental agreement even though we just did some driving on the parking lot in front of the rental. But the two young guys who had invested in the four Segways lined up near the town shepherd's cottage in Kuressaare's old town were friendly enough and let my son ride a few minutes overtime.
Services are still very cheap - I paid EUR 25 for an hour at Saaremaa's top certified Toyota garage, a fraction of what I would pay at my Swedish ditto - and I also had the pleasant experience that the Toyota people had a place on the operating table for my wheels right away. In Sweden, where planning is done by numbered weeks, this would have been impossible, nothing less. One month is good, if you get the waiting down to 2 weeks, you should be grateful.
Estonian home insurance is ridiculously expensive - to my mind there is no doubt that some kind of Baltic tax is exercised by the large players in the market. For years I have paid double the amount for house insurance in Estonia than I do in Sweden. The difference is that in Estonia I have stripped the coverage down to basically storm and fire, whereas in Sweden I have the full kasko, including hidden pipes and fungi. Through some research on the part of my wife, we have now reduced the insurance cost to slightly less than we pay in Sweden.
The service level in shops during the past 20 years has grown from poor to diverse, with the Toyota guys on the positive end and a number of unnamed retailers who short-sightedly believe that retailing is just about getting rid of your stock and never mind the rest. Whether the customer decides to take his money to the shop again is a secondary concern.
Also the lack of common civility between shop assistant and customer when they are forced to interact over the conveyor belt is a known feature in Estonia. The Canadian Estonian Vello Vikerkaar has written comments, some even published in book form, about his relationship to various shop assistants at his local Selver. Something like: "I greeted her with a loud 'Tere!' and she looked at me with blue and empty eyes, saying absolutely nothing in response."
My favourite place to shop in Sweden is my local Svenssons Järn, Svensson's Hardware Store, a place where 'no' is a word never heard. If you ask about some widget that for some reason is not part of their enormous home selection, the next thing you will hear is the slamming of heavy catalogues onto the counter and an estimate of when the desired goods could be in the shop. If the matter is still not clear, the shop assistant will call the supplier and get a quote for you - on the spot!
I understand it is difficult to get good and knowledgeable staff for large outlets like K-Rauta and Bauhof, but if you go to the pro places you can still find staff that know their way round plumbing and electrical wires. Still, I have never heard the slamming of catalogues onto counters in Estonian shops. Why not?