Last year, Ülemiste Centre was visited 7.1 million times – 4% fewer than the year before – yet it retained its position as Estonia’s most preferred shopping centre. Director of Ülemiste Centre Guido Pärnits believes that the second half of 2026 will mark a turning point for retail: savings driven by caution will begin to recede, and people will get used to consuming again.
In the middle of last year, Guido Pärnits stated that the retail sector had reached its bottom and that recovery had begun. Today it can be said that the forecast proved correct, although the pace of recovery turned out to be slower than expected. The director of Ülemiste Centre admits that he had hoped for a faster improvement, but it is now clear that 2025 will remain a transitional year. “The good news is that the hardest part is already behind us. The decline in consumer confidence has stopped, and wage growth once again exceeds inflation. These are the preconditions on which the market can only improve,” said Pärnits.
Looking back, Pärnits noted that the biggest challenge for the retail sector last year was people’s fear of a worsening financial situation, which was excessively amplified by the media and pre-election political debates. “The panic surrounding the increase in VAT proved exaggerated. The end of the world did not come, but damage was done. People became more cautious and cut back on spending,” Pärnits said, adding that bank deposits of private individuals in Estonia are currently at a record level. “This shows that people have money, but the courage to use it has disappeared.”
7.1 million visits and turnover of €231 million
In 2025, Ülemiste Centre was visited 7.1 million times, and total turnover reached €231 million. For comparison, the centre’s best year to date was 2023, when turnover amounted to €247 million. Nevertheless, Pärnits does not consider the decline in turnover alarming, as the retail sector and shopping centres showed moderate growth last year, and the economy is showing signs of recovery. “An autumn study by Kantar Emor confirmed that Ülemiste continues to be Tallinn’s most preferred shopping centre in almost all product categories. This is recognition we value highly,” said Pärnits.
One of the reasons for the drop in visitor numbers, according to Pärnits, is the ongoing construction of the Rail Baltic terminal, which has made access to the centre less convenient. However, this is a temporary constraint. In the long term, the future railway terminal is, in the centre director’s assessment, of strategic importance both for Ülemiste Centre and for the entire area.
The results were also affected by the renovation of around 6,000 m² of retail space in the centre in 2025. Temporarily closed stores inevitably mean fewer visits and lower turnover.
The Christmas period, although it brought the expected seasonal uplift, was not able to offset the caution that had accumulated over the year. “December was quite solid in terms of sales volumes, but there was no miracle that would have compensated for consumers’ earlier caution,” Pärnits noted. All the more, he highlights those retailers who, despite difficult times, dared to invest – and ultimately benefited the most.
“Everyone who went through a renewal ended up better off,” Pärnits emphasized, adding that the children’s goods segment and stores in this category expanded particularly successfully, showing that emotional purchasing has not disappeared. “This is a signal to those retailers who have been considering changes but have not dared to act: 2026 may be the last year when this can still be done on more favorable terms, before retail picks up momentum again.”
Expectations for the new year: the first half of 2026 cautious, the second optimistic
Guido Pärnits’ forecast for the new year is clear: the first half of the year will remain cautious, but a turning point should come in the second half.
“Tax changes this year will leave the average person with noticeably more money in hand. Not enough to immediately buy a car or an apartment, but enough to afford higher-quality food and clothing,” said Pärnits. “I think we are facing several years in which wage growth will outpace price growth, which in turn will lead to a recovery in purchasing power.”
Pärnits stresses that people are getting used to spending money again – and that this is how it should be. “This is not a call for extravagance. One should never spend excessively, but life has to go on. People need to get used to buying again.”
At the same time, one trend worries Pärnits. People in Estonia are traveling more than ever before and increasingly purchasing abroad goods of the brands that are also present in Estonia. At the same time, the advance of cheap Chinese online stores is reducing the turnover of local retailers, especially sellers of small goods.
“If local stores do not generate sufficient turnover, chain retailers also see no prospects in this region. This means that the assortment inevitably shrinks and collections arrive later,” Pärnits warned. “In the end, we find ourselves in a situation where we complain that there is nothing to buy in Estonian stores, even though we ourselves have created this situation. Estonia’s economy needs to be supported by shopping in local stores.”
