We’re starting to drift heavily into “personal experiences with companies” thread territory, but for heaven’s sake, I don’t understand the downplaying of those undeniable problems. Or the downplaying of problems encountered by fellow investors themselves using some “finer folk” argument.
As I see it, very few here, if anyone, have belittled shopping at a discount store. Instead, it’s a major mistake to think that the quality of the customer experience doesn’t matter in a discount store.
And furthermore, it’s a huge problem if you sometimes can’t complete a purchase in the online store. Regardless of whether the buyer is the “riff-raff” of society or the elite.
Now that these “Temu duties” are finally coming into force, it is more important than ever for Tokmanni to get its online store functioning at least tolerably:
And the fact that advertised discount codes repeatedly fail to work as promised is something consumer authorities might have something to say about, if they were inclined to take action.
At least for me, the online store worked well last Thursday. No error messages at any point, even though I spent a lot of time fiddling with the selections. There was another club night last week, and there can be traffic spikes during those, which makes error messages more likely.
The price increase in the shopping cart after the discount code is apparently because a double-discount block was recently added to the system, meaning promotional items lose their discount percentages if you try to finagle newsletter discount percentages into the same order.
Regarding Temu, I’m wondering how that 3-euro handling fee will be implemented going forward. I mean, will the goods get completely stuck in customs? Well, I certainly wouldn’t object if small packages worth mere cents got totally jammed up and were unlikely to be returned. I suppose they’d be “burned” in the Chilean desert like all the other junk.
There’s some hope on a European scale that this handling fee would put an end to the whole “junk trade.” I guess we taxpayers all want what’s best for ourselves. VAT and recycling fees should be collected from every sale, and at the same time, the companies we all own would do better.
I was surprised that the processing fee is as much as €3 for every unique item. You can’t really make AliExpress Choice and Bundle purchases anymore, where you pick €10 worth of different products, since 5 unique items would result in €15 in extra fees.
This could indeed completely change the trading landscape, especially for companies offering more affordable product categories in Europe, so we can assume that this will be a very good boost for all “discount retailers.”
Juha R: You just mentioned a mismatch problem. As a rather wealthy shareholder, I cannot say what a Tokmanni shopper is thinking, and especially what someone living outside urban areas who doesn’t use the online store thinks about Tokmanni and its prices. You could, however, tell us about your own shopping experiences when visiting Tokmanni. Was it crowded or not? I have personally seen excellent sales. So, tell us about your own experiences in brick-and-mortar stores, or perhaps you don’t have any. I see that Tokmanni thrives specifically on brick-and-mortar, so the up-to-dateness of that information is essential, not the online store’s. So, what have you seen in the brick-and-mortar stores? I learned about empiricism at university, and that is how I operate.
Now we are discussing real-world stores. Meaning, whether trade happens in brick-and-mortar or online. At Tokmanni, commerce takes place in brick-and-mortar.
We need to consider whether it is right that buying products worth only cents leads to unemployment and rising taxes in Finland. VAT is understood. As I understand it, everyone wants some services from society. I wonder how, for example, roads are built. A large portion comes from VAT. Where might defense spending or police salaries come from? VAT remains highly essential. In other words, the “trinket trade” erodes the funding of vital functions. Well, if some want a completely private funding model, then entrepreneurs, for example, could fund their pensions entirely themselves, instead of wage earners and us high-income earners paying for them as we do now—it is specifically we who pay for those entrepreneur pensions.
VAT is also collected in “junk shops” (e.g., Temu). Of course, it is lower than in Finnish brick-and-mortar stores because the same product is cheaper.
You surely understand what is best for Finnish society. So, it’s probably not worth crossing swords over this any further today. Merry Christmas! Let’s continue next year.
The goal of this is to end the flood of small packages from China, which our postal service has been subsidizing thanks to a stupid, ancient UPU postal agreement that should have been terminated long ago.
In practice, shops selling cheap Chinese goods are forced to set up warehouses in the EU area, where they then bring shiploads of goods to be sold as intra-EU shipments. Shipping costs are then actually reflected in the price because the seller has to pay the actual freight costs from China to Europe and then include them in the price.
This levels the playing field between Chinese shops and companies operating within the EU now that shipping is no longer subsidized.
Surely that 3€ fee isn’t remitted to the postal service?
Despite that fee, it is cheaper for Chinese commerce to continue with the current system for most products than to come and compete with European online stores.
I haven’t looked into how that fee works, but my understanding is that the logic is to try and reduce the influx of these small shipments, but in a way that doesn’t completely overwhelm the Customs agency, whose systems would collapse if every package went through customs with full bureaucracy.
The real fix would still be withdrawing from the UPU (Universal Postal Union) agreement… if that UN-affiliated body cannot move China out of the “developing country” category, where international postal traffic is subsidized by “rich countries”.
You are certainly right that the commenters on this forum (which ≠ readers) likely do not comprehensively represent Tokmanni’s most important segments: “Lindas,” “Pirkkos,” or “Jennas and Veetes,” and the “Sami segment.” (As Tokmanni presented its categorization a year ago).
But in my own investor method, retail (and consumer) companies are overweight for a strategic reason. Following my mentors, I aim to invest only in companies whose operations (or industry) I can understand well enough to truly understand their competitive advantage (moat). In the retail sector, you are, for example, on a more equal footing with institutional investors because you have the opportunity to evaluate the customer experience. Overall customer experience, in turn, is one of the most important determinants of competitiveness. One could even say, to simplify, that the customer is the only factor that determines the success of a company, or a nation. I would see that the competence to understand the customer is indeed the biggest reason for, for example, the relatively better success of Sweden and Denmark—compared to us Finns.
Whether you can build a model covering larger segments from your own subjective customer experience of course depends on your own competence. Your own experience doesn’t necessarily correlate with the whole, but it gives you the possibility to do so. “Yesterday there was a queue at Tokmanni’s checkout” leaves a lot of room for a statistical anomaly. And it might even lead to a wrong conclusion: anticipating peak rushes in Christmas trade is the easiest thing to predict and can be done with a calendar years in advance. The fact that there is a queue at the checkout then might indicate that the specific store lacks the systemic ability to optimize shift planning, which is very risky for success and profitability. Or a queue could also indicate an inability to integrate the retail industry’s most efficient technology like Inditex—where there are no longer checkout queues because of RFID and IP.
Therefore, I would hope that in these retail sector threads, our own experiences could be curated and contextualized by us writers. Because if we as a community can do that, we can truly create added value for each other through our own experiences as well.
Ps. After monitoring the contents and size of nearly 200 Tokmanni-Spar customers’ shopping bags in early autumn, I dared to draw conclusions about the competitiveness of Spar’s current concept. The difference to the adjacent Citymarket (Cittari) was statistically significant. I am not capable of an equivalent analysis of competitiveness within the procurement departments of China’s largest developers, where presumably about twenty individual people determine Kone’s regional success. Or I don’t pretend to know how buyers of Metso’s paper machines in South America see their overall customer experience. Regarding those, it’s best to just follow the Norwegian oil fund… Regarding Tokmanni, my own experience at least gives a chance for a relative competitive advantage in investing.
I personally wonder about this speculation regarding a “profit warning resulting from a mild winter.” It’s either typical Finnish investor pessimism, or the company management is (like at other companies, year after year) a bunch of fools if they still base their annual guidance on the assumption that the Finnish winter would be snowy and cold (for months), even in the south. The company certainly needs to prepare for the lack of snow, at least in the south, and manage their product range accordingly. After all, medium-term forecasts already indicated a long time ago back in early autumn that a mild early winter was coming.
Well, not everyone is a pessimist, as Tokmanni’s share price has risen on a monthly, weekly, and intraday basis. This might already be making short sellers sweat.
The problem with these orders is that the stock has to be ordered in advance. By early autumn, you can’t really make major changes to them anymore. For example, order volumes for the following year’s Christmas chocolates must be locked in as early as spring.
I believe the same applies to goods coming from China. That’s probably why Tokmanni’s inventory value is always elevated in early autumn.
Could this be partly due to the company itself? Tokmanni has quite often blamed its poor performance on weather conditions, claiming it’s either too cold or too hot, and so on. Even spring always seems to arrive at the wrong time, which is why excess inventory is sold off at massive discounts.
Most recently, in October–November, they were clearing out stock in a big way—and not just Chinese junk; branded tools and such could be bought from the clearance section at steep discounts.