For the first time, Svensk Handel has taken a comprehensive look at how consumption in Sweden is distributed between city centers, external trade, standalone stores, and the internet. The new report, Handelskartan (The Trade Map), presents a clear picture of the structural shift that has fundamentally reshaped the Swedish retail landscape over the past seven years.
Although physical retail as a whole still accounts for 85 percent of total retail sales and has grown by 24 percent since 2018, it is e-commerce that is driving the real expansion. Online sales have increased by a full 99 percent between 2018 and 2025, effectively doubling in value. With a total market share of 15 percent, Swedish e-commerce is now officially larger than all of the country's city centers combined, which account for 13 percent of the total.
E-commerce Crushes City Centers in Non-Essential Goods
The shift is most noticeable in non-essential goods, including items such as clothing, electronics, books, and home furnishings. Here, e-commerce has made significant strides and now accounts for a full 25 percent of the total market, up from 16 percent in 2018. During the same period, the share of non-essential goods retail in city centers fell from 19 to 15 percent. E-commerce is therefore ten percentage points larger than city retail in this category, trailing only external trade by car, which accounts for 33 percent.
In grocery retail, the internet has a lower total share of 4 percent, with standalone stores in residential areas dominating with 53 percent of the market. But even in the food sector, digital growth has been strong in percentage terms, with an increase of 214 percent since 2018 following the new consumption patterns established during the pandemic.
Highest E-commerce Share in Small Towns
One of the most interesting insights from the report concerns how e-commerce performs in different types of municipalities. It is not in the major cities that e-commerce has its strongest position relatively speaking, but in small and medium-sized towns. There, e-commerce accounts for 16 percent of total trade, compared to 15 percent in major cities and 14 percent in larger towns.
The explanation lies largely in how physical retail is structured in smaller towns. In small towns, external trade accounts for only 18 percent of turnover, while the corresponding figure in larger towns is as high as 40 percent. When access to large shopping areas and wide physical assortments is more limited, e-commerce steps in as a crucial purchasing channel for residents of smaller towns.
At the same time, the report shows that trade in small towns has strengthened its position since 2018 and that more consumers are choosing to shop locally compared to a few years ago.
Despite the fact that small towns still experience an outflow of purchasing power, we see that they have strengthened their position since 2018. More consumers are choosing to shop locally, which shows the importance of trade for the attractiveness and development of smaller municipalities, says Maria Mikkonen, Chief Economist at Svensk Handel.
Increased Purchasing Power in All Municipalities
Looking ahead, the long-term prospects for trade appear bright. The report's forecasts to 2035 predict that purchasing power for non-essential goods will increase in all 290 Swedish municipalities as real incomes rise. For groceries, purchasing power is expected to grow in eight out of ten municipalities, with development being more closely linked to local population growth.
According to Svensk Handel, the growing purchasing power offers good opportunities, but the development also underscores the importance of understanding how people's purchasing patterns continue to shift between stores and the internet.
As shopping patterns continue to change, while future purchasing power grows in different parts of the country, these are important issues for municipalities and retail companies to follow in order to understand and attract tomorrow's customers and markets, says Elisabet Elmsäter Vegsö, Business Policy Expert at Svensk Handel.