Internal Trade
Internal (or domestic) trade means, by its very nature, the free exchange of goods and services between economic operators or between economic operators and consumers whose economic interests are located on the domestic market of the same country, i.e. domestic trade includes domestic economic activities related to the sale of goods and services. It is irrelevant whether the products are purchased from a local shop, a market, a supermarket or even from a door to a door or at an exhibition - all these are examples of internal trade because the goods are purchased from local businesses or individuals.
Internal trade is divided into domestic retail and wholesale trade. Retail trade is a form of trade that citizens are most exposed to in their daily lives. It includes the sale of goods directly to the final consumer. Goods are sold in local shops, markets, supermarkets, food shops, e-commerce platforms, etc. The retailer can act as an intermediary between the wholesaler and the consumer. Retailers may provide services such as advertising goods to wholesalers, packaging, transporting, storing, marking and other products making them more easily accessible to consumers. Wholesale includes the purchase of goods directly from the producer and their resale to retailers who ultimately sell these goods to end-users. Wholesalers mainly buy goods in large quantities from the producer, store them and then resell them to retailers. They play an important role in the supply chain by ensuring the continued supply of goods to retailers.
The regulation of internal trade and the activities of trading companies at the state level include the rules established by laws and secondary legistlations which regulate: sales relations between entities, general requirements for the placing on the market and sale of goods, labelling requirements, requirements for advertisement of goods and etc.
Certain areas of internal trade and aspects of the activities of trade firms are regulated by the Civil Code of the Republic of Lithuania, Republic of Lithuania Law on Prohibition of Unfair Practices of Retailers, Republic of Lithuania Law on Alcohol Control, Republic of Lithuania Law on Control of Tobacco, Tobacco Products and Related Products, Republic of Lithuania Law on Competition, Republic of Lithuania Law on Consumer Protection, Republic of Lithuania Law on Product Safety, Republic of Lithuania Law on Pharmacy, Republic of Lithuania Law on Advertising and other laws. Subordinate legislation and subordinate legal acts also have an important role to play, such as the Retail Trade Rules, Rules on the Labelling and Price Listing of goods, Rules on the Licensing of Wholesale and Retail Trade in Alcoholic Products and Rules on the Wholesale and Retail Trade in Tobacco Products and Tobacco Related Products, and on the Licensing of the Wholesale Trade in Untreated Tobacco. Trade in certain goods such as arms, ammunition, alcoholic beverages, tobacco products, medicines, antiques in the Republic of Lithuania is subjected to licensing and special regulation.
Differences between internal (domestic) and international (foreign) trade
International trade, also known as foreign trade, is the sale of goods between different countries. This type of trade includes both imports and exports of products which are absent or difficult to produce domestically. Foreign trade is often used to expand markets and increase revenue by allowing companies to reach customers outside national borders.
On the contrary, internal trade takes place within the country. It includes the purchase/sale of goods between residents and enterprises of the same country. Internal trade is an important component of the economy as it creates jobs and stimulates economic growth.
The main difference between foreign and internal trade is the level of competition. In internal trade, competition is limited to domestic companies, which may make it easier for businesses to establish themselves. Meanwhile, in international trade, companies are in competition with businesses operating on the world market, which makes competition more intense.
Furthermore, foreign trade often involves higher risks than internal trade, as international trade transactions contain several variables such as exchange rates, transport costs and barriers to trade. While these risks can be managed through appropriate strategies, they always remain relevant in international trade.
Regulating retail trade
11/06/2001 Resolution No 697 "On the Approval of Retail Trade Rules"
Republic of Lithuania Law on Prohibition of Unfair Practices of Retailers No XI-626
Regulating the labelling requirements of goods sold in the Republic of Lithuania
Regulating trade in alcoholic products
Republic of Lithuania Law on Alcohol Control No 1-857
Regulating the sale of tobacco products
Republic of Lithuania Law on Control of Tobacco, Tobacco Products and Related Products No I-1143
Regulating advertising
Republic of Lithuania Law on Advertising No VIII-1871
Regulating the buying-in of scrap metal and waste of base metals
Republic of Lithuania Law on the Purchase of Base Metal Scrap and Base Metal Waste No IX-565
Regulating payments in commercial transactions
Republic of Lithuania Law on Prevention of Late Payments in Commercial Transactions
According to the provisions of the "Law on Prevention of Late Payments in Commercial Transactions", where payment for goods, services and works delivered under commercial contracts is made late, a simpler procedure in court, i.e. the process of applying for an injunction, is available for the purpose of enforcing the debt against the debtor and for the recovery of the interest provided for by the law. This procedure is applicable in cases where the goods, services and works delivered under commercial contracts are paid late, but where the late payment interest claimed does not exceed the statutory rate of interest on late payment. Otherwise, the court could be approached in the ordinary way by bringing an action.
The Code of Civil Procedure stipulates that when applying to the court for the issuing of a court order, the application must be made to the court in accordance with the standard application form. It is not complex and the content of the application does not require a serious analysis. An application for a court order may also be lodged electronically.
It also notes that no evidence is required to accompany the application for the issuing of a court order and that the procedure is extremely rapid: the issue of acceptance of the application shall be settled no later than on one working day following the day on which it was lodged with the court. If the application meets the requirements a court order shall be issued on the following workday.
When deciding on the issue of the acceptance of the application and the issuing of the court order, the court shall not examine the validity of the creditor's claim and the parties shall not be invited to the court hearing, therefore the procedure is particularly favorable to business entities without placing them in lengthy and complex proceedings.
Studies and analyses
The calculations and estimates contained in the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, in the context of restrictions on the establishment of retail businesses, places Lithuania is 6th place among the least restrictive EU countries, and, within the framework of restrictions on the operation of retail businesses, Lithuania is in the 9th place among the least restrictive EU countries.
Retail Restrictiveness Indicator (RRI for short) is a tool used by the European Commission to measure the level of regulatory restraint in the retail sector in all EU Member States. It assesses various factors, such as market entry barriers, operating restrictions and the regulatory environment.
Entry barriers indicate that it is easy or difficult for new retail businesses to enter the market.
Operating restrictions reflect statutory requirements that affect the day-to-day operation of retail businesses (e.g. working hours and product mix restrictions).
The regulatory environment is a general regulatory framework that affects the retail sector, including licensing requirements and tax policy.
Although the indicator covers the whole set of regulatory requirements for retail sales in the Member States, the indicator itself is not intended to assess whether the restrictions on retail sales imposed in the Member States are proportionate and justified. This is a monitoring tool, the data of which should assist Member States in determining whether changes to their national legal regulation on retail trade are necessary. This would allow the creation of a more competitive and dynamic single retail ecosystem across the European Union and would enhance the economic independence of the Member States.
This indicator gives the impression of different restrictions on domestic retail sales in the Member States, reflects the complexity and diversity of the regulation applied in each Member State separately and, at the same time, throughout the European Union. At the same time, this helps to identify restrictions for the Single Market (Single Market). The Single Market (Single Market), because every time new restrictions are introduced, Member States must carry out an assessment of whether the restrictions are justified and proportionate, i.e. whether no equally restrictive means would be available to achieve the public objectives pursued.
The figures for this indicator were made public in 2018 and 2022.
From the data below, it appears that Lithuania, together with Estonia, Latvia, Slovakia, Bulgaria, the Czech Republic, in comparison with other Member States, is seen as a small State regulator of domestic retail trade.
Overview from 2019 to 2022
In 2019, the turnover of businesses involved in trade and food and beverage activities showed an increase compared to 2018. The retail trade sector experienced a growth of 5.3% in turnover in 2019, with a significant increase of 25.1% in constant prices compared to 2015. Within the retail trade sector, food, alcoholic beverages, and tobacco retailers saw a 1.8% increase in turnover compared to 2018 and an 8.6% increase compared to 2015. Non-food retailers experienced a higher growth rate with an 8.8% increase in turnover in 2019 compared to the previous year and a remarkable growth of 30.8% compared to 2015 at constant prices. Enterprises engaged in wholesale and retail trade and repair of motor vehicles and motorcycles experienced a substantial increase of 14.5% in 2019 compared to 2018 and an even more significant increase of 76.7% compared to 2015 at constant prices. Furthermore, establishments in the food and beverage industry saw a 5.4% increase in turnover in 2019 compared to 2018, along with a 26.5% increase compared to 2015 at constant prices. Finally, the wholesale trade sector saw a 5.2% increase in turnover in 2019 compared to the previous year, with a 24.7% increase compared to 2015 at constant prices.
In 2020, there were contrasting trends in the turnover of various sectors. The retail trade sector saw an increase in turnover, with a 2.8% growth compared to 2019. This growth was even more significant when compared to 2015, with a 28.7% increase at constant prices. Within the retail sector, retailers of food, alcoholic beverages, and tobacco experienced a 2.7% growth compared to the previous year, and an 11.5% increase compared to 2015. Non-food retailers also saw positive growth, with a 6.6% increase in 2020 compared to 2019, and a substantial 39.4% increase compared to 2015 at constant prices. However, the wholesale and retail trade and repair of motor vehicles and motorcycles faced a decline in turnover, showing a decrease of 10.5% in 2020 compared to 2019. Nevertheless, when compared to 2015, there was a substantial 58.1% increase in constant prices. Finally, the food and beverage service sector experienced a significant decrease in turnover, with a 25.9% decline in 2020 compared to 2019, and a 6.4% decrease compared to 2015 at constant prices. Wholesale trade establishments, on the other hand, saw a positive growth of 7.1% in 2020 compared to the previous year and a 33.6% increase compared to 2015 at constant prices.
The Covid-19 pandemic has had a significant impact on the economy, resulting in increased restrictions on businesses and movement. Retail sales have seen a decline of around 11% overall in late 2020 and early 2021, compared to a 17% decline during the first wave of the pandemic. However, some sectors within retail sales, such as fuel trade, have experienced less significant reductions, with a drop of around 8% during the second wave. This suggests that the country's economic activity has been less affected by the recent deterioration of the epidemiological situation. As of January 1, 2020, Lithuania had 107,444 economic entities, accounting for 45% of all registered economic entities. Wholesale and retail trade, along with the repair of motor vehicles and motorcycles, were the main sectors, representing 23.1% of all entities.
In 2021, there was an overall increase in the turnover of businesses in the retail and wholesale trade sectors, as well as in the catering and beverages activities sector. Specifically, the turnover of retail trade establishments increased by 12.7% at constant prices compared to the previous year. Retail trade establishments dealing in food, alcoholic beverages, and tobacco products saw a 5.5% increase in turnover, while those dealing in non-food products experienced a higher increase of 19.1%. Additionally, enterprises engaged in the retail sale of automotive fuels saw a significant increase in turnover of 13.5%. Furthermore, the turnover of enterprises engaged in the wholesale and retail sale and repair of motor vehicles and motorcycles increased by 24.8% at constant prices in 2021 compared to 2020. These findings indicate positive growth and activity in the mentioned industries compared to the previous year.
In 2022, various sectors of the retail and wholesale trade industry saw changes in turnover compared to 2021. Retail trade establishments experienced a 0.8% increase in turnover at constant prices. However, within the retail trade sector, establishments dealing in food, alcoholic beverages, and tobacco products saw a decrease of 5.9% in turnover, while non-food retailers saw a decrease of 3.9%. On the other hand, enterprises engaged in the retail sale of automotive fuels experienced a 6% increase in turnover. The wholesale and retail sale and repair of motor vehicles and motorcycles also saw a significant increase of 9.8% in turnover at constant prices in 2022 compared to 2021. Additionally, enterprises engaged in the provision of catering and beverages experienced a substantial increase of 39.9% in turnover in 2022 compared to 2021 at constant prices. Overall, these changes reflect the dynamic nature of the retail and wholesale trade industry in 2022.
Overview from 2023 to 2024
In 2023, despite the positive trends, retail sales declined in the second half of the year, falling by 3.5% in July, with declines in both food and non-food segments. In June, excluding inflation, retail turnover was 2.5% lower than in the same period in 2022. In July, a 3.8% decline in turnover was recorded, and in August a 1% decline. Food sales declined every month: 2% in June, 5.4% in July and 3.9% in August.Rising interest burdens and inflationary pressures have also had a strong impact on sales of durable goods such as audio, video, IT, watches and jewellery. For example, retail sales of IT goods fell by more than 10% in the first half of the year between January and June.Despite the fall in sales, there are positive signals. An important technical factor is the comparative basis - retail sales performance in the fourth quarter of 2022 was poor, which is favourable for 2023. In August, the overall retail sales drop was the smallest since the beginning of the year, while the non-food sector showed the best performance in 2024.
Retail sales in Lithuania experienced a slowdown in 2022, but this was attributed to factors such as slowing inflation and improving consumer expectations. As economic conditions improved and price growth moderated, households became more confident in increasing their spending on goods. In the fourth quarter of 2023, retail turnover grew by 1.6% compared to the previous quarter. Preliminary data shows that retail businesses excluding motor vehicles and motorcycles recorded a turnover of €18.6 billion in 2023, a decrease of 1.2% compared to 2022. Sales of foodstuffs declined by 3.9%, while non-food items decreased by 0.6%. However, automotive fuels retail sales saw an increase of 1.4%. The State Data Agency reported that the retail market in Lithuania experienced gradual growth in the first half of 2024, with retail turnover growing by 3.2% year-on-year. Sales of both food and non-food items also saw positive growth. In July, total retail turnover grew by 5.7%, with food sales increasing by 5.1% and non-food sales experiencing a 6.1% annual growth.
Prospects for 2025
Lithuanian economy is expected to experience growth in domestic consumption and retail turnover in 2025, with an estimated rate of 4-5%. This growth is largely driven by the population's positive perception of the financial outlook and an expected increase in average wages of 7%. The rise in wages is influenced by overall economic growth and a 12% increase in the minimum wage. Inflation is projected to reach 2.7% next year. These factors contribute to a recovery in the purchasing power of the Lithuanian population, leading to optimism among consumers. The positive consumer sentiment and favorable financial outlook are expected to be reflected in retail indicators in about seven months' time. Therefore, it seems that the beginning of 2025 will bring positive prospects for the Lithuanian retail market.
The COVID-19 pandemic and the quarantine measures have significantly changed the way consumers buy goods and services online. The e-commerce sector, which has grown rapidly in recent years, has further flourished. During the quarantine period, businesses had to adapt to changes in consumer behaviour, resulting in the emergence of many new online shops in Lithuania, while long-established players have seen their sales/revenues increase several-fold. The COVID-19 pandemic and quarantine had a major impact on the Lithuanian population's decision to buy online. In recent years, smart devices have significantly changed the way we communicate, use various electronic services and share information. Consumers' purchasing habits have also changed over time.
Technological advancements have contributed to the rapid growth of online shopping, and the COVID-19 pandemic has further accelerated this trend. E-commerce has expanded to new businesses, consumers, and product types, allowing people to conveniently and safely purchase a wide range of products from the comfort of their homes. This has been especially beneficial during the pandemic when contact restrictions and quarantines have limited physical shopping. The e-commerce market has also expanded to include new consumer segments, such as the elderly, and new product categories, including food. These developments in the e-commerce market are likely to continue in the long term due to the potential for future epidemic waves, the convenience of online shopping, and the incentives for companies to invest in innovative ways of selling goods. In Lithuania, the percentage of people aged 16-74 who have ordered goods or services online has steadily risen over the past decade, reaching 60.9% by 2023.
The State Data Agency reported a significant increase in the use of digital technologies among households, particularly among the older generation. The number of internet users has been steadily rising, with 81.6% of 16-74 year olds accessing the internet in 2019 and this number increasing to 86.9% in 2021. The pandemic also played a role in pushing older individuals (65-74 years old) to embrace the internet, with a 5.5% increase in internet use among this age group from 2019 to 2020, reaching 46%. In 2021, 55.2% of individuals in this age group were already internet users, and 33% of them used the internet on a daily basis. Among older internet users, the most common activities included searching for news, reading newspapers and magazines (41.2%), staying in touch (37.5%), and finding information about goods and services (33.5%). These activities were similarly popular among the 55-64 age group, highlighting the importance of online information searching for older individuals.
The COVID-19 pandemic has led to a significant increase in online shopping in Lithuania. Since the start of the pandemic in 2020, the percentage of people who bought or ordered goods or services online has increased by 6.2% to reach 60.0%. This is a significant jump compared to the consistent 5% per year growth seen in previous years. The data from 2021 shows that the age group of 25-34 had the highest number of online buyers, with 90.8% of individuals in this age group purchasing online. This represents an increase of 11.7% compared to 2019. The 35-44 age group also saw a notable increase of 16.3% in online buyers, accounting for 81.9% of the total in that age group. Additionally, there has been a significant increase in online purchasing activity among young people aged 16-24, with an estimated 84% of individuals in this age group buying or ordering goods or services online in 2021, representing a 16% increase compared to 2019. Similarly, the 16-29 age group experienced a 14.3% increase in activity, with 86.9% of individuals in this age group engaging in online shopping. Among individuals aged 45-54, 54.6% ordered goods or services online in 2021, an increase of almost 12.7% compared to 2019. Overall, the pandemic has accelerated the shift towards online shopping in Lithuania, with people of all age groups embracing this way of purchasing goods.
According to the official portal of the State Data Agency, one in six people in the oldest age group (65-74), or 16.8% of internet users in this age group, have already shopped without leaving home. In 2019, the percentage was 10.1%. According to the Official Statistics Portal, the quarantine of online shopping in 2020 will have the least impact on people in the 55-64 age group (around 2%). However, as a result of the prolonged restrictions, 34.1% of people in this age group had already tried online shopping in 2021, an increase of 8.4% compared to pre-pandemic levels. In July 2020, the data research company Gemius launched an e-commerce study revealing people's online shopping habits. It shows that better prices online compared to prices in traditional shops are a key motivator for online shopping. Discounts, special offers and home delivery are also key drivers of the decision to buy online. 52% of Lithuanians surveyed had made an online purchase during the 2020 quarantine period, while 26% said they had not made a purchase but planned to in the near future.
A survey conducted by Gemius in Lithuania revealed that 83% of internet users in the country made online purchases in 2020, with a third of them doing so multiple times a month. The COVID-19 pandemic was a major factor that encouraged 56% of respondents to buy online. Additionally, the survey found that 40% of participants reported an increase in their online shopping expenses during the quarantine period, compared to just 22% in 2019. According to the State Data Agency, the majority of individuals who purchased physical goods in 2021 did so from Lithuanian e-shops (91.7%), followed by EU-based e-shops (36.4%), and e-shops from other parts of the world (29.5%). Notably, online sales of food, medical products, and household goods experienced significant growth during the pandemic. Individuals aged 25-34 were found to be the most active online shoppers, spending on various categories such as entertainment, health, and home furnishings.
Between 2020 and 2023, Lithuania experienced a trend of increased online shopping but reduced average basket sizes. In 2022, the average person spent €59.88 on online purchases, but this amount decreased to €48.33 in 2023. This is partially due to a reorientation of e-commerce shops, with a gradual decrease in the share of higher-priced technical goods. Compared to physical stores, the average basket size was significantly lower but increased by 41 cents to €21.76 in 2022. The growth of e-commerce in Lithuania is influenced by various factors, including consumer age, online skills, convenience, reliability, and enjoyment. During the COVID-19 pandemic, Lithuanian consumers particularly valued the convenience of online shopping, as it allowed easy access to product information and price comparisons. However, it is worth mentioning that just over half of the population (52.91%) in Lithuania has basic or above basic digital skills, according to Eurostat.
The growth of e-commerce popularity in Lithuania in the COVID-19 period was also influenced by the internationally popular marketplace model, which allows businesses to quickly start trading without their own e-shop. The growing popularity of e-commerce has also been driven by the variety of payment methods. It provides a seamless shopping experience for customers, reducing the number of unpaid baskets, increasing loyalty and reducing the risk of unsuccessful transactions or payment glitches. Security is also an important aspect, with some payment methods offering robust features to help protect merchants and customers from fraud and data loss.
The COVID-19 pandemic has resulted in changes in consumer shopping habits, particularly in the online e-commerce sector. A group of regular online shoppers has emerged, with more people buying food online and prioritizing convenient delivery methods. Swedbank data shows that in the first half of 2021, customers spent EUR 754 million on e-commerce in Lithuania, a 55% increase compared to the same period last year. Nearly 50% of the country's population now shops online weekly or more often, with 15% shopping online almost every day. The majority of Lithuanians, especially those between 26 and 45 years old and residents of large cities, have tried online shopping, with over 90% of 18 to 56-year-olds doing so. These changing shopping habits are important for online retailers and service providers to consider.
The ranking of online shops active in Lithuania is published on InternetoParduotuves.lt. The ranking is based on publicly available or self-reported traffic data. The ranking was last updated in December 2023 with data from November. At that time, 341 online shops participated in the ranking. The 2020 Gemius survey found that the most popular foreign e-shops among Lithuanians are aliexpress.com, amazon.com, ebay.com, wish.com and asos.com. However, they do not compete significantly with companies registered in Lithuania. The analysis of the data shows that the COVID-19 pandemic and the quarantine have had an impact on turnover and profit growth. Statistics show that the third month of quarantine has already changed people's shopping habits. The relaxation of the quarantine restrictions resulted in a drop in e-sales revenues, which were still higher than in the pre-pandemic period. They have not decreased after the end of the quarantine.
Last updated: 07-04-2025