Zita Sorokienė, chairwoman of the Lithuanian Small Business and Retail Association, said “Lithuanians are not accustomed to shopping in small stores, but they are getting used to it because they’ve seen how beneficial it can be.”
Sorokienė explained that “Cauliflower-gate,” the three-day boycott of large supermarket chains that was inspired by complaints about the high prices of cauliflowers, led people to rediscover their local small stores and markets. “Their merchants say that they noticed a larger flow of shoppers during the boycott,” she said.
Jekaterina Rojaka, senior economist for the Baltic states at DNB Bank, said that the trend has been revealed through statistics as well: “Based on statistics, last year, people started spending more money in small, specialised cheese, meat and ecological product stores. Consumers began looking for different products that they can’t find in supermarkets, but this trend has primarily been seen in larger cities,” she said.
“This has to do with growing salaries, changes in shopping culture, and a wider array of choices. Without consistent income growth, it would be difficult for such stores to prosper and survive,” said Rojaka.
Why Lithuanians love large shopping centres
Though they are gradually turning towards smaller stores, Lithuanians love large shopping centres that offer a larger selection of products than they might ever need.
“This is because, after leaving the Soviet Union, shopping centres and large varieties of products were both totally new things for us. We had experienced a period when shopping was limited and product shortages was an everyday thing. When large shopping centres began to open, everyone swarmed to admire the selection and organisation of products in the stores,” recalled Sorokienė.
“This is the fault of the municipal institutions of the time: they, hypnotised by new opportunities and the selection of products, failed to control the process and did not see the benefits that small businesses could bring for the state and its economy.”
Conditions are improving for small businesses
Outlooks on small businesses have been changing recently, said Sorokienė, but conditions are still difficult, which makes it difficult for small businesses to prosper.
“However, things are improving, so I believe that we will see a time when towns and villages will have more small specialised stores,” said Sorokienė.
“If small businesses were to prosper more, buyers would feel the benefit as well. With smaller expenses, small businesses could offer lower prices. Of course, they may not offer a large selection, but not everyone really needs such a wide selection. Besides, this is beneficial from an economic perspective – people who can create their own businesses will not emigrate,” said Sorokienė.
Small stores still claim certain niches, said Rojaka, and competing with the margins of large shopping centres is hard for them. However, when it comes to quality, they can often easily surpass any shopping centre.
In economically developed economies and under normal circumstances, an abundance of small businesses and stores can increase competition and reduce prices, but this is not the case in Lithuania.
“Lithuania’s situation is different from Europe’s developed nations. In developed countries, shopping centres’ working hours are limited and they are located on the edges of cities, in the suburbs. In Lithuania, large shopping centres can be found in city centres, so for smaller stories, competing with them with similar or lower prices is difficult,” said Rojaka.
“On the other hand, we see that farmers offer their products, if not for lower prices, then for similar prices, and I think that’s the right path for us,” she said.
Opportunities for smaller businesses to prosper, according to Rojaka, have been hampered by restrictive requirements for opening small shops during Lithuania’s transition to the free market in the early 1990s.
“Though now the level of bureaucracy is decreasing, opening a store is easier, but the starting positions were not the same, so it’s hard to imagine smaller shops catching up with big supermarkets,” said Rojaka.