New shopping hours have changed consumer habits

A year after ‘lukkeloven’ changes, consumers have embraced extended shopping hours, but the economic benefits of the law are still to be determined

admin

Oct 1, 2013

One year ago today, Danish retailers received more flexibility in how long they could stay open each day, in particular on Sundays.

The new closing hour law (lukkeloven) was initially met with mixed reviews and empty shops, as consumer habits needed time to catch up with the liberalisation of store hours. But now that the policy has had 12 months to sink in, there’s still uncertainty about what kind of impact it’s had in Denmark.

So far, analysts seem to believe there are two conclusions: Danish shopping habits have changed, and the economic impact is that smaller stores are struggling to survive against competitors with deeper pockets.

Customers embraced the change
When the new law was announced, the polling firm Megafon did a study that showed that nearly two thirds of Danes were in favour of the extended hours. As it turns out, customers liked the freedom provided by the law change, and many have now made Sunday their primary shopping day, eschewing the weeknights that had been the norm. Stores had a hand in the shift too, offering coupons and deals exclusive to Sundays.

“Sunday has become a really important shopping day,” Mads Hvitved Grand, a spokesperson for Dansk Supermarked, told Politiken newspaper. “In our shops, sales have moved from weekdays to the weekend, and people now like to do their big shopping on Sundays.”

The relaxation of Sunday shopping policies is part a recent trend that has taken hold in some European countries, as nations looked to jolt their economies with increased shopping hours on what has been a traditional day of rest around the continent. Greece changed its shopping hours in July as part of a larger effort to revive the moribund economy, while France has debated whether new Sunday rules would upset its work-life balance.

Sales increase minimal
Judging the economic impact of extended hours is complicated. According to Statistics Denmark, sales of food and groceries have made only negligible gains.

Meanwhile, smaller stores have succumbed to competitors who have the resources to staff those extended hours. This year alone, according to Retail Institute Scandinavia, 96 grocery stores have closed in Denmark, quite a bump compared to 2009-12, when 69 stores closed on average per year. However, 57 new grocers opened during the same time period. Henning Bahr, the head of Retail Institute Scandinavia, said it was hard to determine how many shops closed as a result of the new hours and how many closed due to the continued expansion of established discount chains.

Mogens Bjerre, an associate marketing professor at the Copenhagen Business School, suggested smaller businesses would struggle with the added costs of staying open.

“For the vast majority, it’s at least 50 percent more expensive to stay open on Sundays than on normal weekdays,” Bjerre told Politiken.

Prior to the lukkelov changes, small kiosks with annual income less than 32.2 million kroner were exempt from having their opening hours regulated and could operate on Sundays without competition.