Retail News

DECEMBER 2024

The retail year 2024 – overcoming the regulatory tsunami

Another year has flown by and things are - slowly - looking better in the retail sector! Despite continued global uncertainty and a regulatory tsunami in the EU, there are encouraging signs: interest rates have gone down, cost increases have slowed down, the recession is starting to loosen its grip and both businesses and consumers are looking more positive about the future.

In September 2024, former ECB President and Italian Prime Minister Mario Draghi presented his extensive and widely noted report on Europe's future competitiveness. The so-called “Draghi Report” highlights the importance of the Union's contribution to the strengthening of the competitiveness of European businesses and emphasizes the importance of simplifying and improving regulation within the EU to facilitate businesses, particularly for small and medium-sized enterprises (SMEs).

HUI Research's analysis and forecast at the end of the year is that the industry has begun to recover, also in relation to durable goods, but that it will take until the second half of 2025 before consumers start spending more. The cautious approach has been an issue and remains so: consumption in Sweden has not increased at the pace many expected given the economic recovery. This may be partly due to global tensions, continued consumer caution, consumers getting used to not always buying new products - or a conscious effort by consumers to take responsibility for the environment by limiting consumption.

Going forward, we as consumers need to adapt to goods that are sustainably produced, that last longer and can be repaired - even if it comes at a higher price. This is a necessary journey that will take time, but also presents an opportunity.

The retail and textile industries are leading the way as pioneers, fostering innovation, development, collaboration and optimism about the future. It may be challenging and exhausting at times, especially at the end of a busy year in the midst of darkness. And that's ok.

What has the industry done this year and what will happen in 2025?

It is clear that sustainability remains a top priority. Manufacturing should be carried out using renewable energy and sustainable, recyclable materials. Processes are being optimized to minimize material consumption, to create long-lasting products and to make them repairable. Additionally, transportation throughout the entire supply chain must be sustainable. In addition to its own operations, EU companies must oversee their entire supply chain - ensuring that partners comply with labor law, uphold human rights, meet sustainability requirements, and much more. CS3D poses and will continue to pose a challenge for many. This applies to all industries, but the retail sector is particularly affected due to its significant climate impact.

Textiles are the type of industry and material that first will be regulated by the EU's sustainability rules, partly due to their significant climate impact and partly because customers are consumers. We are ready to help you in navigating these regulations and provide support and guidance in practical implementation.

During the year, we have assisted several companies that were audited by the Swedish Consumer Agency, the Swedish Authority for Privacy Protection and a number of other authorities regarding everything from environmental claims, product content and labeling of products to price reductions and consumer-targeting marketing.

The retail sector, particularly e-commerce businesses, is also affected by EU regulation on consumer protection and the digital package with rules on accessibility requirements and rules regarding the use of AI. All these rules, of course, have a good purpose; we should protect the environment, consumers, privacy, human rights, competition and businesses within the EU. However it is a tsunami of regulations that we must try to tame into a more maneuverable river.

The initiative of the Confederation of Swedish Enterprise's, together with several other business organizations in the EU, to clarify what is needed to increase the EU's competitiveness - including simplifying the rules that businesses must follow - is very good. However, in order to navigate regulatory tsunami until regulatory simplifications are in place, it is crucial to strike the fine balance between ongoing operations, innovation and development and prioritization.

It can feel overwhelming, but at the same time, it is under pressure that we can become most innovative and find new business ideas and solutions. Just think of the COVID-19 vaccine that was developed in record time, streaming services that took over after legal or illegal downloads, the list is long., It will be very exciting to see what happens in 2025 and beyond!

Checklist for 2025

What new rules are coming this year that the retail sector will have to follow?

Consumer law

On June 28, 2025, e-commerce platforms, among others, must meet the new accessibility requirements. PTS has conducted a survey and found serious deficiencies in all the actors they investigated. Read more about the survey here.

In the spring of 2025, the Swedish Consumer Agency is expected to present the results of the audits carried out in the fall of 2024 following previously identified deficiencies in companies' pricing information. This may lead to new guidance and case law in the field. New precedents have already emerged from the European Court of Justice, which recently ruled that price reductions must be calculated based on the previous lowest price.

Digital Governance

In February 2025, certain uses of AI will be completely banned under the EU AI Act.

In the second half of 2025, the Swedish Cybersecurity Act is expected to enter into force. It implements the NIS2 Directive, which affects businesses in food production, parcel distribution, manufacturing of electronics and machinery as well as digital services and online marketplaces.

The EU Data Act will enter into force in September 2025. Its purpose is to provide users access to data generated from the use of certain products and enable them to transfer that data to a new provider if they choose to do so.

Privacey and data protection

On April 1, 2025, a new legal remedy is proposed to be introduced for slow or non-existent handling of complaints by the Swedish Authority for Privacy Protection (IMY). A data subject will have the right to request to be informed whether IMY will initiate supervision after three months have passed since the complaint was submitted. IMY will then have two weeks to either inform the complainant about the supervision or deny the request in a reasoned decision.. Do you want to learn more about in the developments in the field of data protection? Check out our privacy and data protection newsletter here.

Sustainability

On January 1, even more companies will be required to produce sustainability reports under the CSRD and textile waste will be collected separately from other waste. By December 30, companies must ensure that deforestation has not occurred anywhere in their value chain.

The new EU Deforestation Regulation (EUDR), expected to enter into force on December 30, 2025, means that raw materials and products sold on the EU market may not come from deforested land. Companies will therefore need to ensure that deforestation has not occurred anywhere in their value chain.

MAQS Retail Team provides guidance on digital governance and sustainability

The MAQS Retail Team has helped clients throughout the year to identify, map and prioritize among all the regulations that apply within digital governance and sustainability.

This work includes;

1. Analyzing how the companies are affected,
2. In some cases, registering the companies with the supervisory authority,
3. Conducting risk assessment,
4. Implementing processes, routines, policies and mapping documentation,
5. Ensuring that terms of use and information texts comply with the regulations; and
6. Advise on how to allocate responsibilities internally.

We offer training on sustainability regulations, pricing information, digital governance, privacy & data protection and the adjustments needed for accessibility requirements, AI rules and IT security such as NIS2. Many of our clients also face challenges in dealing with the Agency Work Act. We assist clients with:

1. Reviewing and categorizing all consulting agreements and temporary workers to determine whether or not the Agency Work Act applies.
2. Documenting the time of hiring and creating procedures for calculating the 24-month limit.
3. Reviewing agreement with existing consulting firms and staffing agencies to, where possible, terminate or replace individuals before the qualification period is reached. 
4. Reviewing contract terms and the possibility of contractual annexes to clarify that a specific consulting agreement should not fall under the Agency Work Act and allocate the risk should this assessment prove to be incorrect.
5. Checking whether employees working in a line functions at the client's premises can be considered covered by the Agency Work Act and, if so, what actions need to be taken to mitigate business risk.

Would you like to hear more or have any questions about how your business is impacted by the requirements or how to address or prioritize them? Contact us and we'll schedule a meeting!

Retail- and sustainability expert joins MAQS 

In January 2025, we will strengthen the Retail Team with Systembolaget's (Swedish retail alcohol monopoly) former General Counsel Anna Domander.

She has extensive experience and understanding of the challenges and opportunities that companies and their legal functions face, especially when it comes to dealing with the flood of regulations that wash over us.

Anna is tasked with leading MAQS' advisory services on sustainability matters and she will be a valuable addition to our Retail Team.

- I look forward to returning to the consulting role and to being part of MAQS' exciting growth journey and the firm's strong retail team. After several years as General Counsel, I have gained deep insight and understanding of the challenges and opportunities that companies and their legal functions face

- experiences that I now want to use to create value for MAQS' clients, says Anna Domander.

MAQS Retail Talks 

We will kick off the retail year on January 17 with MAQS Retail Talks on business models for chains, where you’ll hear from speakers from retail companies that have undergone transformative journeys during 2024.

Mio has evolved from being a specialty retail chain to a company with self-owned stores, where the store owners have gone from owning their businesses to owning shares in the company. Linus Gustafson from Mio, who has driven the entire journey, participates and talks about his experiences.

Mestergruppen has expanded in Sweden through the acquisition of, among others, the paint retailers Colorama and Happy Homes. The company operates as a voluntary speciality chain, but Magnus Olsson has been involved in many other ways to run chains and will share his experiences.

Fazer runs Gateau, a well-established artisan bakery, and has recently taken the step to also operate units through franchise models. Josefin Isaksson talks about what it's like to run a franchise business as part of a food corporation.

Sign up for the event!