Consumers in Estonia are ordering more household items online instead of in stores, a shift affecting large hypermarket-format stores that rely on more than grocery sales.

Rimi Estonia CEO Kristel Mets said online stores are taking a growing share of non-food sales from hypermarkets, and the fact that many products are being ordered from abroad represents a loss for the entire country.

“Smaller coffee machines, towels, socks, rain boots, children’s clothing are often ordered from Germany or the Netherlands — wherever those online stores are located,” Mets explained. “All of these items are easily available in Estonia, but it’s simple to see those deals and order them within the EU. Sales of household items are increasingly leaving Estonia.”

She added that this trend has a noticeable impact on hypermarkets, where non-food items make up a significant portion of overall sales.

Shoppers seem to prefer slightly smaller stores, like regular supermarkets.

“Estonian customers are demanding and want a wide selection of fresh food throughout the day,” Mets noted, adding that supermarkets are the best format to meet that demand. Even so, hypermarkets remain important, with weekend shopping holding steady.

The Rimi CEO disagreed with claims by Prime Minister Kristen Michal (Reform) that Estonia’s high food prices stem from excessive retail space. She said competition in other sectors, such as hardware stores, is also fierce, and any link between retail density and real estate prices is unclear.

Rimi is opening a new supermarket in Keila on Thursday, part of a local retail boom noted by the prime minister, with Lidl and Coop also set to open new stores in town.

However, Mets said Rimi began planning its Keila store in 2018, and didn’t alter its plans despite news of competitors.

“There will certainly be competition, but we’re not concerned,” she said, predicting that the new shopping center opening next year will also attract customers who previously shopped in Tallinn.

In a competitive market, Mets emphasized that more important than store size is strategy, and Rimi closes stores that aren’t able to compete. This year, that has included locations in Võru and on Akadeemia tee in Tallinn.

“We’re not willing to operate at a negative margin,” she explained, adding that demand still determines the business model.

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