EUROPE QUARTER BY NUMBERS - Nielsen Global Connect · AUSTRIA SNAPSHOT While the Austrian economy...
Transcript of EUROPE QUARTER BY NUMBERS - Nielsen Global Connect · AUSTRIA SNAPSHOT While the Austrian economy...
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Copyright © 2017 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
QUARTER BY
NUMBERS Q4 2018
EUROPE
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CONTENTS –EUROPE WEST
SECTION 1
THE BIG PICTURE: EUROPE WEST Message from Olivier Lamare ………………………………………………………………………..….
EUROPE AT A GLANCE Key economic drivers……………………………………………………………………………………..
Looking through West Europe FMCG Lens………………………………………………………......
COUNTRY SNAPSHOT Austria……….………………………….…………………………………………………………………..
Belgium………………………………………………………………………………………….......……..
Denmark………………………………………………………………………………………..................
Finland………………………………………………………………………………………………….......
France………………………………………………………………………………………………………
Germany……………………………………………………………………………………………………
Ireland…………………………………………………………………………….…………….......….......
Italy……………………………………………………………………………………....……………........
Netherlands………………………………………………………………………………....……………..
Norway………………………………………………………………………………………..………........
Portugal…………………………………………………………………....………………….……….......
Spain……………………………………………………………………………………………..…………
Sweden……………………………………………………………………………………………….........
Switzerland………...………………………………………………………………………………………
United Kingdom…………………………………………………………………………….……………...
IN THE INDUSTRY Changing Consumer Propensity : How consumer spending is evolving…………………………..
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T 8
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14
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26
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32
35
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CONTENTS – EUROPE CENTRAL & EAST
SECTION 2
THE BIG PICTURE: EUROPE CENTRAL & EAST Message from Roberto Pedretti and Daniel Chorbadjian…………………………...........................
EUROPE AT A GLANCE Key economic drivers…………..…………………………………………………….…………..........
Looking through Europe Central & East FMCG Lens…………………………………………….......
COUNTRY SNAPSHOT Belarus……….………………………….………………………………………………………………….
Bulgaria……….………………………………………….…………………….......................................
Croatia……….………………………………………….…………………….......................................
Czech Republic……………………………………………………………………………………………
Estonia…………………………………………………………………………………………....………..
Greece………………………………………………………………………………………………….......
Hungary…………………………………………………………………………………………………….
Kazakhstan…………………………………………………………………………………………...……
Latvia……………………………………………………………………………………....……………….
Lithuania……………………………………………………………………………………………………
Poland………………………………………………………………………………………………………
Romania…………………………………………………………………....………………………………
Russia………………………………………………………………………………………………………
Serbia………………………………………………………………………………………………………
Slovakia…………………………………………………………………………………………………….
Slovenia……………………………………………………………………………………………………
Turkey………………………………………………………………………………………………………
Ukraine……………………………………………………………………………………………………..
IN THE INDUSTRY Changing Consumer Propensity : How consumer spending is evolving…………………………..
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T 57
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THE BIG PICTURE:
EUROPE WEST
Olivier Lamare
Retail Services
Developed Markets
As everyone holds their collective breath for the approaching BREXIT and its potential
impacts, it may be a good time to consider that moving forward there will be plenty more
“external” factors to our industries that will present challenges and opportunities. One of these
is changing consumer prosperity.
Over recent years, we have seen observations from market leaders in Western Europe that
highlight growth coming from both budget and premium offerings. Often, at the same time and
in the same market. The success of private label has come with examples of premium, niche
and craft products while the popularity of hard discounters has been accompanied by growth
in specialty stores and convenience.
The expanding fragmentation of the financial and spending capability of consumers across
Europe, is evident in these observations and the widening gap is something that will become
an increasingly important factor in FMCG. On February 21st, Nielsen released a report on
Changing Consumer Prosperity around the globe and it drew into focus some of the European
mentality that we ought to consider.
In Europe, 37% of consumers feel they are better off financially than they were five years ago,
32% say they are about the same and 31% are worse off versus five years prior. The
proportion of respondents who are worse off is the highest region in the world. There are some
noticeable variances across markets and in Western Europe the likes of France (36%)
Finland, Italy and Norway (all 35%) have the highest percentage of people saying they are
worse off. There are a handful of Eastern European markets who are among the top “better
off” consumer groups globally.
The dynamic economic conditions we are experiencing including various social and political
uncertainties across Europe, is creating a sensitive consumer market where the attitudes and
approach to spending stretches across a spectrum that retailers, manufacturers and industry
players have to navigate in smarter ways to continue winning.
Part of a winning formula is to understand what European consumers are willing and not
willing to pay a bit more money for and this again differs across markets. Looking at Europe
on a regional level, consumers report they are more likely to spend a premium on clothes,
shoes, electronics, meat/seafood and tea or coffee and least likely to pay a premium for
tobacco, carbonated beverage, frozen meals, salty snacks and cereal. They are also seeking
certain benefits that will often lead to higher price points like organic ingredients and this has
been seen in healthy options with 28% of Europeans saying they will pay more for these
qualities. Even with these variances at a market level, the challenge is complicated by
consumers switching approach to premium or budget by occasion and options at different
quality and price tier may become increasingly critical.
Looking forward, economic growth and associated levels of discretionary spending ability may
be more subdued in Western Europe when compared to some buoyant forecasts in areas like
Asia or even Eastern Europe. This will not dampen prospects across the board in Western
Europe but continue to fragment the consumer landscape and increase the need for more
targeted, thoughtful and precise approaches to the consumer where consideration of spending
capability and financial situation will be key.
You can access the Changing Consumer Prosperity report here or you can email
regan.leggett@nielsen for questions.
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Q4 2018Q4 2018 vs
Q3 2018
GDP
(annual %
growth)
Inflation
France 64 -13 0.9 1.9
Finland 83 -7 2.8 1.3
Netherlands 105 -7 1.8 2.0
Switzerland 99 -7 1.8 1.3
Portugal 87 -6 1.7 0.8
Norway 89 -5 1.8 3.4
Sweden 95 -4 2.4 2.1
Ireland 106 -4 2.8 0.9
UK 98 -3 1.3 2.2
Spain 94 -3 2.4 1.7
Germany 104 -2 0.6 2.0
Denmark 120 -2 2.3 0.8
EUROPE WEST AT A GLANCE
ECONOMIC PULSE OF CONSUMERS
AROUND EUROPE
The Conference Board® Global Consumer Confidence Survey is conducted in
collaboration with Nielsen measures perceptions of local job prospects,
personal finances and immediate spending intentions. Consumer confidence
levels above and below a baseline of 100 indicate degrees of optimism and
pessimism, respectively
Economic uncertainty has impacted consumer confidence across
many Western European markets in the last quarter
CONSUMER CONFIDENCE INDEX
CONSUMER CONFIDENCE INDEX
GDP and Inflation reflect % change per annum to Q4 2018 or (-) indicates not available at time of publication
Source: Economist Intelligence Unit (EIU) * estimate/OECD/local government sources
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
GDP
(annual %
growth)
Inflation Q4 2018Q4 2018 vs
Q3 2018
2.0 2.1 Austria 103 3
0.1 1.4 Italy 70 1
1.2 2.6 Belgium 94 1
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22
11 1214
11
20
30
1815
27
19
25
7
22
14
2321
15
24
10
19
8
22 23
33
1820
12
1715
20
14
0
5
10
15
20
25
30
35
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SEThe economy Increasing utility bills (electricity, gas, heating, etc)
Although positive sentiment prevails across Western Europe there is still
caution in consumers minds with many indicating they prefer to save rather
than spend.
WHAT ARE THE TOP 2 CONCERNS IN THE NEXT SIX MONTHS?
WHO’S SPENDING, SAVING AND INVESTING?
Type of concern
After living expenses, how is spare money spent
Bars reflect Q4 2018. Table shows comparison to Q3 2018
EUROPE WEST AT A GLANCE
Bars reflect Q4 2018. Table shows comparison to Q3 2018
CONSUMER SENTIMENTS IN
EUROPE
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
4036
39
29 28
4652
37 39
46 44 45
5350 49 51
38 37
26
34
48
27
48
21
32 33
26
47
34 33
2327
0
10
20
30
40
50
60
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
Putting into savings New clothes
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
Putting into savings 2 2 -2 -1 0 -3 2 7 0 1 5 -5 -2 -2 4 5
New clothes 0 1 -4 0 3 -2 4 -2 -7 -2 -1 0 6 -5 2 1
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
The economy 0 -1 2 2 -2 1 1 -3 4 6 6 2 1 0 2 2
Increas ing uti l i ty bi l l s (electrici ty, gas , heating, etc)3 0 -5 0 7 0 6 1 11 -2 2 -4 1 0 1 6
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0.4% 1.6%1.2% 1.2%
0.4%
2.4%1.9%
1.1% 1.1%
0.5%0.3%
2.3%
3.2%
1.6% 1.5%
-0.1%
-1.3%-1.6%
-1.2%
0.3%
-0.2% -0.2% -0.6%-0.3%
0.8% 1.2%
-0.5% -0.5%
0.2%0.9%
0.3% 0.2%
-0.4%
0.0%
0.7%
2.2%
1.7%
0.5%
0.8%
1.3%1.4%
1.7%
2.7%
1.8%
2.5%
AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
Unit value change Volume change Nominal growth
IRELAND (+1.7%)UK (+0.8%)
FRANCE (-0.2%)
LOOKING THROUGH EUROPE WEST FMCG LENS
FAST MOVING CONSUMER GOODS MARKET DYNAMICS – Q4 2018
Weighted average – WEST EUROPE – 15 countries
WHERE ARE THE FMCG GROWTH OPPORTUNITIES?
Average volume growth Q3 2018 & Q4 2018
Avg. volume growth decreasing versus last period
Avg. volume growth increasing versus last period
ITALY (+0.5%)
BELGIUM (-0.9%)
NETHERLANDS (+0.6%)
SPAIN (+0.4%)
Colour coding indicates growth or declining trend
compared to same 6 month period year ago
Average volume growth of Q3’18 & Q4’18 vs Q3’17 & Q4’17.
AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
SWITZERLAND (-1%)
AUSTRIA (0%)
FINLAND (+2.5%)
DENMARK (+0.9%)
NORWAY (+0.1%)
SWEDEN (+1.6%)
GERMANY (-0.2%)
PORTUGAL (+0.4%)
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AUSTRIA SNAPSHOT
While the Austrian economy experienced a strong upswing throughout the year, GDP slowed
toward the end of 2018, with growth at 2% in Q4 2018. However, strong exports, price
stability and high investment activity are great indicators for another strong economic
performance in 2019. Consumer confidence hit a significant high, climbing to 103 points.
Almost half of Austrians (49%) feel that now is a good time to buy the products they want and
need (up 7 points from Q3), with their confidence in personal finances also growing by two
points to 61. Optimism regarding job prospects, on the other hand, contracted four points to
63, but was still much stronger compared to previous years.
Despite strong economic indicators, the FMCG market couldn’t quite keep the pace in 2018.
After a bit of headway in Q3 due to the warm weather (up 0.8%), growth slowed again in Q4
with volume sales declining -0.1% and prices increasing slightly by 0.4%. The total market
ended Q4 with a 0.3% for the quarter and 1.1% for the year.
While mid-sized Hypermarkets (1000-2499m2) and Supermarkets (400-999m2) remain
positive growth drivers, large food stores (250-399m2) showed the greatest decline (-5.3%).
The long-term slowdown of Discounter sales also continues in Q4, decreasing by -0.3%,
What’s behind this development? Aggressive promotion strategies by other retailers —
challenging Discounter’s price positioning. To try to counter this, Discounters are
transforming themselves increasingly into regular supermarkets, addressing consumer trends
and providing similar shopping experiences as other retailers do.
Looking at the 12 month trends, alcoholic beverages (3.5%) and non-alcoholic beverages
(4.0%) recorded the biggest gains due to the extended summer. Baby and personal care
segments performed the weakest, as consumers increasingly purchase these categories
online. The top five manufacturers of food and drug assortment combined grew by 4.5% and
outperformed all other manufacturers.
As retailers and manufacturers strategize for 2019, focusing on conscious consumer trends
will be a key trend to capitalize on for growth. With a strong economic outlook and consumer
confidence at its record high, we anticipate FMCG sales to lift during the course of the year.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q4 18 OECD
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Jens Olig
Managing Director
Austria, Germany,
Switzerland
87 87 86 87 87 8494
102 100 101 101 103
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU AT
3.02.8
3.2
2.82.6
2.02.2 2.3
1.92.2 2.2 2.1
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
9
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1.1%
3.5%
0.4%
1.8%
-5.3%
0.7%
-0.3%
1.6%
Total FMCG Hypermarkets 1000 - 2499 m² Hypermarkets > 2500 m²
Supermarkets 400 - 999 m² Large Food 250 - 399 m² Small Food Up To 250 m²
Discounters Drug Stores
TOTAL AUSTRIA – CHANNEL PERFORMANCE
FMCG growth outpaced by GDP growth: FMCG market slows again in Q4 with
volume sales declining -0.1% and prices increasing slightly by 0.4%.
Long-term slowdown of Discounters continues in Q4, fuelled by aggressive
promotion strategies by other retailers — challenging Discounter’s price USP.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
15%
8%
40%
3%2%
24%
8%
1.5%1.0% 0.5% 1.1% 1.4%
2.6%1.5%
0.9%
0.8%
0.4%
2.9%0.2%
3.1%
5.2%
2.4%
1.1%
1.8%
-0.7%0.0%
-0.1%
4.3%
1.1%
3.6%
6.3%
3.9% 3.7%3.3%
0.2%0.8%
0.3%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Austria
Unit Value Growth Volume Growth Nominal Value Growth
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Baby and Personal care segments show weakest growth, as consumers
increasingly purchase these categories online.
TOTAL AUSTRIA – SUPER CATEGORIES PERFORMANCE
TOTAL AUSTRIA – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
Top 5 manufacturers outperform all others, fuelled by warm weather sales
from Beverage manufacturers.
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 8.5%
Top 6-10 4.8%
Top 11-30 9.8%
Top 31-100 11.3%
100+ 44.9%
Private Label 20.8%
1.1%
4.5%
-0.5%
2.8%
1.0%
0.6%
0.6%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Fresh Food Perishable 32.7%
Culinary Shelf-Stable & Other 17.0%
Dairy 11.4%
Alcoholic Beverages 8.4%
Non-Alcoholic Beverages 7.3%
Homecare/Pet Care 7.0%
Confectionery 7.0%
Personal Care 6.1%
Hot Beverages 2.4%
Baby Care 0.7%
1.1%
0.0%
1.6%
1.2%
3.5%
4.0%
1.2%
1.1%
-0.2%
0.5%
-1.5%
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BELGIUM SNAPSHOT
While economic growth remains steady in Belgium, consumers remain cautious. With
Brexit imminent, Belgian consumer confidence has grown slightly by one point to 94, but
optimism on job prospects has receded four points to 47. Amidst the relatively sizeable
legal wage increase that took place in January this year, optimism on personal finances
grew one point to 46%. 42% of people believe that now is the right time to buy the
things they want and need, up two points from Q3 2018.
As price and inflation are dominating topics within the Belgian FMCG world, Q4
developments were relatively in line with the preceding quarters — as volume sales
dropped 1.3% and prices jumped 1.6%, leading to a (rounded) 0.2% total FMCG market
growth.
Looking at the trends by channel across the year, Superettes (5.8%) and Large
Supermarkets (1.7%) continued to drive the growth, with Small Supermarkets declining
by 0.6%. This is in part due to coverage changes with the closure of some Small
Supermarkets this year.
Due to the unseasonably warm and protracted summer, we saw a jump in non-Alcoholic
Beverages (6.8%). Alcoholic Beverages showed a contraction of -0.1% due to the tax
on alcohol, which has increasingly driven consumers to purchase their alcohol across
the border.
Salted Snacks (2.3%), Fresh (2.3%) and Bakery and Toast (3.7%) were the big winners
of 2018, not only due to the prolonged summer — but also due to price increase on
bread and meat and growing popularity of nuts due to the health trend. The Top 5
manufacturers benefited the most from the warm weather boosts due to increased sales
on soft drinks and ice cream.
Heading into the late Easter period, retailers and manufacturers have a great
opportunity to build longer sales cycles for their seasonal Easter products — which can
result in significant additional sales, particularly if the weather isn’t too hot. Given the
rising importance of bio products, we expect to see a growing number of manufacturers
marketing these trends during this holiday season.
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) ) Q4 18 OECD
Pedro Lima
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Pedro Lima
Managing Director
Belgium,
Netherlands
87 8786
87 87
84
95
85
88
91
93 94
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU BE
1.5
1.9
1.5 1.4
1.7
1.2
1.9 2.0
1.5
2.22.3
2.6
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
12
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TOTAL BELGIUM – CHANNEL PERFORMANCE
Given that price and inflation are dominating topics within the Belgian
FMCG world, Q4 was in line with preceding quarters — as volume sales
dropped 1.3% and prices jumped 1.6%.
Superettes are capitalizing on consumers’ focus on convenience, enjoying
5.8% growth.
FMCG MARKET DYNAMICS - BELGIUM
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
1.0%
-0.9%
1.7%
-0.6%
1.3%
5.8%
Total FMCG Hypermarkets Large Supermarkets
Small Supermarkets Discounters Superettes
11%
50%
18%
17%
3%
1.3%
2.3%
0.8%
1.3%
1.0%
2.2% 2.3%
2.2%
2.9%
1.6%
-0.2%-1.3%
-0.8%
1.4%
-0.8% -0.4% -0.8%
-2.3%
-0.5%-1.3%
1.2% 1.0%
-0.1%
2.7%
0.2%
1.8%1.5%
-0.1%
2.4%
0.2%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Belgium
Unit Value Growth Volume Growth Nominal Value Growth
13
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TOTAL BELGIUM – SUPER CATEGORIES PERFORMANCE
MAT Q4-2018 MAT Q4-2018
TOTAL BELGIUM – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
The Top 5 manufacturers benefited the most from the warm weather boosts due to
increased sales on soft drinks and ice cream.
Prolonged summer, price increases, health trends, and the holiday season
positively impacted Salted Snacks, Fresh, and Bakery & Toast
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Alcoholic Beverages 14.5%
Dairy 13.5%
Fresh Products 12.2%
Non Alcoholic Beverages 12.0%
Grocery 11.6%
Health & Beauty 8.2%
Housekeeping 5.8%
Frozen 5.0%
Confectionery 4.6%
Sweet Snacks 3.6%
Hot Beverages 2.8%
Salted Snacks 2.4%
Pet Product 1.9%
Bakery & Toast 1.8%
1.0%
-0.1%
2.4%
2.3%
6.8%
-1.6%
-1.7%
0.2%
0.1%
-1.6%
-0.9%
-1.6%
2.3%
0.2%
3.7%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 15.0%
Top 6-10 8.2%
Top 11-30 13.9%
31-100 10.5%
100+ 15.3%
Private Label 37.1%
1.0%
3.1%
-0.1%
0.2%
0.3%
0.7%
1.0%
14
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0.9 0.9
-0.8
0.5
2.12.3
1.51.3
0.71.0 0.9 0.8
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
DENMARK SNAPSHOT
The Danish economy showed strong performance through the last two quarters of
2018, seen in a low unemployment rate and in the highest Consumer Confidence
Index in Europe.
FMCG sales increased by 0.9% during 2018 vs. 2017, which is at the same level of
growth as the year before. The growth was purely driven by price increases, while
the volume sales in 2018 ended at the same level as in 2017.
The footprint from the warm and sunny summer had a minimal impact towards the
total grocery trade but substantially influenced categories within. Beverages and ice
cream responded positively, while the confectionery super category suffered from
lower demand due to the heatwave.
Our shopper research shows for the first time, that the demand for shopping in
Discount stores is decreasing leading to fewer store visits while the visits in
supermarkets are increasing. Meeting the local shopper demand for value, service,
convenience and proximity at store and category level is critical for both
manufactures and retailers to succeed.
The winners in this intense battle between brands, retailers and channels are those
that focus on meeting changing shoppers demand in the best and increasingly
personal way. Danish shoppers are looking for the best promotions either before
they shop or when they browse the shelves online or offline so retailers and
manufacturers must ensure consistency in their branding and pricing strategies - no
matter the channel.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) ) Q4 18 OECD
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Cecilie Westh
Managing Director
Nordics
87 87 86 87 87 84
115 116 114 118 122 120
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU DK
15
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TOTAL DENMARK– CHANNEL PERFORMANCE
The growth in Q4 is mainly driven by continued growth within Beverages and
Frozen food while Household products and Personal care continue to decline.
The convenience channel continues to grow due to increased on the go
consumption and demand for proximity
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
0.9%
0.6%
4.6%
Total FMCG Grocery Trade Convenience
93%
7%
1.9%
0.9%0.8%
1.2% 2.3%
2.6%
1.7%
0.7%
-0.5%
0.4%
-1.0% 0.0%
-1.5%
-0.1%
-1.4%
-0.5%-1.1%
0.1%
1.6%
0.3%
0.9% 0.9%
-0.7%
1.2%1.0%
2.1%
0.5%0.9%
1.2%
0.7%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Denmark
Unit Value Growth Volume Growth Nominal Value Growth
16
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Beverages and Frozen food performance driven by increased demand for
specific categories like water, soft drinks, juice, rose wine, energy drinks, multi-
pack ice cream, ice lollies. Price increases are driving value sales within milk
products and butter.
The decline in Personal care and Household products are mainly due to
challenging new channels like Normal and E-commerce
TOTAL DENMARK – SUPER CATEGORIES PERFORMANCE
MAT Q4-2018 MAT Q4-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Packed Food 27.6%
Beverages 22.3%
Dairy Products 15.7%
Fresh Food 12.2%
Confectionery 6.4%
Frozen Food 6.2%
Household Products 5.8%
Health & Beauty 3.7%
0.9%
-0.7%
4.3%
3.0%
-0.1%
-3.1%
5.0%
-4.2%
-3.6%
17
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FINLAND SNAPSHOT
In Q3 2018, Finland witnessed a record ten year high in consumer confidence but it
flattened back to below the EU average in Q4 driven mostly by declining spending
intentions and diminished foreseeable job prospects. Consumer prices are slowly on the
rise and GDP growth rate declining. Still FMCG value grew at a good pace versus year
ago at 3.7 % driven mostly by price increases accounting for two thirds of the growth
and moderate volume growth at 1.0 %.
Smaller store formats led the value change at the cost of hypermarkets’ slowdown,
partly driven by legislation change in the beginning of 2018 allowing stronger alcohol
(5.5 %) content products to be sold in grocery stores than the year before. Before the
stronger alcohol products were only available in the government stores often situated
close to hypermarkets or larger supermarkets.
E-commerce has taken foothold with strong growth of 28% in 2018 – driven by shoppers
trialling purchasing FMCG goods online. E-commerce FMCG penetration increased 2%
points to nearly 18% meaning 50,000+ new online FMCG shoppers. The structure of the
online FMCG basket is changing and now contains more basic food items than it did a
couple of years ago. However, the online share is still below 1.0%.
2018 was a year of positivity among consumers as well as the FMCG industry with
unprecedented hot weather in the summer pampering the Finns even further. Towards
the end of the year a rise in news coverage on slowing rate of general growth and
economists warning on diminishing outlook for the future reflected in the last quarter
results. Finnish shoppers visit more stores within a month than the average for the
European shopper. They are looking for the best promotions at the right price,
increasing the number of trips they make but shopping for smaller baskets. This is more
evident among shoppers aged under 50 years as older shoppers (50+ years), with
stronger purchasing power have a larger basket. For the future, connecting e-commerce
and 50+ year old shoppers, controlling 58% of the FMCG spend, by removing barriers to
purchase FMCG online will be the key to future growth of e-commerce.
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q4 18 OECD
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Cecilie Westh
Managing Director
Nordics
87 8786
87 87
84
8180
8283
90
83
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU FI
2.3
2.72.5
2.3 2.3
2.8
0.70.6
0.8
1.1
1.41.3
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
18
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TOTAL FINLAND – CHANNEL PERFORMANCE
FMCG market growth in 2018 was strongest for some years. Exceptional Q3
growth was affected by the summer heat wave and increase in Beverages,
but Q4 returned to normal levels.
Smaller store formats led the growth at the cost of hypermarkets with stronger
alcohol content products (max.5.5%) more easily available in neighbourhood
stores. Previously these products were available in government run stores
often located near hypermarkets and larger supermarkets.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
37%
28%
10%
11%
6% 8%
3.7%
0.7%
6.9%
4.0%
5.9%
7.5%
0.7%
Total FMCG Hypermarket Supermarket Superettes Hard Discounter Variety Stores Other Shop Types
0.7%
2.7%
-0.7% -1.1% -0.7%
1.0%
1.8%
2.0%
2.3%
1.9%1.0%
1.0%
2.1%
3.2%2.5% 0.5%
-1.0%0.0%
5.3%
-0.2%
1.7%
3.7%
1.4%2.1% 1.9% 1.6%
0.8%
2.0%
7.6%
1.7%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Finland
Unit Value Growth Volume Growth Nominal Value Growth
19
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Beverages and Frozen food lead the growth with increase in both value and
volume. Largest super categories; fresh food and dairy grew slightly in value,
but saw a decline in volume.
TOTAL FINLAND – SUPER CATEGORIES PERFORMANCE
TOTAL FINLAND – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
Hot summer and government legislation change for alcohol beverages with a
max 5.5% alcohol led to breweries being the fastest growing manufacturers.
Largest brewery in Finland falls in the top 6-10 largest manufacturers group
growing fastest.
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 15.5%
Top 6-10 6.9%
Top 11-30 14.9%
Top 31-100 12.6%
100+ 26.4%
Private Label 23.7%
3.7%
3.7%
6.2%
5.6%
3.9%
2.2%
3.1%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Fresh Foods 35.4%
Dairy 15.3%
Shelf Stable Foods 13.9%
Beverage (Excl.Wines&Spirits >5.5% Alc.) 11.2%
Others 10.2%
Household Products 5.3%
Hygiene 4.8%
Frozen Foods 4.0%
3.7%
2.4%
1.3%
2.0%
14.1%
5.0%
-0.2%
2.3%
7.4%
20
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2.72.8
2.2
1.61.5
0.91.0
1.2
1.5
2.1 2.2
1.9
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
FRANCE SNAPSHOT The FMCG industry in France had a difficult finish in 2018 reporting a 0.5% growth in
value and -0.6% drop in volume during the last quarter, along with a low consumer
confidence.
Since mid-November, the yellow vests movement has been a newsworthy event,
with people protesting in the streets against the government and blocking streets
every Saturday. Despite significant fears from retailers and brands, the impact was
limited over the whole period. Although many stores faced record-high losses on
Saturdays, French shoppers quickly adapted and shifted their purchases to other
days in the week, and other preferred channels such as ecommerce and
convenience stores instead of large hypermarkets, which were more difficult to
reach.
The last quarter confirmed the momentum of e-commerce (mostly click & drive in
France) with 7.5% growth as well as consumers’ appetite for small and medium
FMCG companies. The growing force within FMCG has been the Sweet Frozen and
fresh market industries (both Dairy and Non-dairy). We also observe the continuing
trend of “premiumisation” that has been evident over the past five years. Likewise,
healthy food is on the rise. Organic food has seen significant growth in 2018, up
23% in grocery stores while specialized organic stores continue their expansion. The
Christmas period added a positive touch despite a calendar effect (December 31st
not included in our 2018 data); December 23rd and 24th appeared to be the number
one Sunday and Monday for more than two years!
We anticipate FMCG will grow 1.2% in 2019 on the back of stable volumes and
slight increases in prices. A new legislation (‘EGAlim law’) has just been introduced
which caps promotional levels for retailers as well as guaranteeing a fair price to
producers. This might create a slight inflationary trend for food products in the
following months, redefining the retail landscape, which could be more favourable to
Private Labels.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q4 OECD
Anne Haine
Managing Director
France
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
87 87 86 87 87 84
7179 79 78 77
64
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU FR
21
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TOTAL FRANCE – CHANNEL PERFORMANCE
Uncertainty and yellow vests movement have undermined consumers confidence.
FMCG resisted more than other industries but still felt the impact in Q4.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
E-commerce over performs compared to other channels, with click & drive
meeting shoppers expectations and retailers testing new concepts
(e.g. “pedestrian click & collect”)
1.5%
-0.2%
1.4%
2.7%
7.5%
4.6%
Total FMCG Hypermarkets Supermarkets
Convenience Drive (E-Commerce) Smpl / Discounters
41%
34%
9%
5%
12%
1.4% 1.7%1.3%
-2.0%
1.1% 1.6% 1.3%
1.8%
2.3%1.1%
0.3%
-0.2%
-2.0%
5.1%
0.2%
1.5%
0.2%
-0.5%
0.1%
-0.6%
1.7%1.5%
-0.7%
3.1%
1.3%
3.1%
1.5% 1.3%
2.4%
0.5%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
France
Unit Value Growth Volume Growth Nominal Value Growth
22
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Fresh categories answer consumers needs for better, healthy food with a
strong focus on organics, many innovations and appetite for ready meals.
TOTAL FRANCE – SUPER CATEGORIES PERFORMANCE
TOTAL FRANCE – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
Small players continue positive performance while major players face more
difficulties. Private Label return to green and should register positive trends in 2019.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Sweet Grocery 17.7%
Fresh Non-Dairy 17.4%
Dairy 16.2%
Savoury Grocery 12.1%
Alcoholic Drinks 9.7%
Soft Drinks 7.1%
Homecare 5.9%
Personal Care 5.7%
Paper Products 3.6%
Savoury Frozen Food 3.3%
Sweet Frozen Food 1.2%
1.5%
0.4%
2.9%
2.6%
1.1%
1.6%
1.7%
2.3%
-1.8%
0.2%
-1.2%
7.3%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 11.5%
Top 6-10 7.2%
Top 11-30 16.5%
31-100 16.7%
100+ 15.7%
Private Label 32.5%
1.5%
0.2%
-0.1%
2.4%
2.4%
3.4%
0.5%
23
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GERMANY SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD GDP for Q4 2018
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Germany’s economy has slowed over 2018 with GDP growth at 1.1% in Q3 and 0.6%
in Q4. Supply-side developments such as labour and capacity bottlenecks have been
cited as some of the causes behind the slowdown and expected price increases for
goods and services and a renewed willingness to save are curbing consumer
spending in Germany. However, experts predict that private consumption will pick up
again in 2019 with GDP growth predicted to be around 1.5% for 2019.
In FMCG, slightly higher prices (1.2%) and lower sales volumes (-1.2%) balanced
each other out in Q4. Overall growth for the year 2018 was with 2,0% the same level
as the year before and mainly driven by price increases. Summer weather until
October continued to drive sales in the "heat wave" product groups such as non-
alcoholic beverages (3.9%), beer & beer mix (4.6%) and ice cream (5.5%).
Winter seasonal product groups are posting losses. The decline in nuts and almonds
for baking (-11.0%), Christmas Cake (Stollen -5.4%) and biscuits (-3.6%) testifies that
pre-Christmas period was not as strong as previous years. However, Halloween
festivities helped special confectionery with growth at 33.4%, with significant range
expansion in certain Discounters. Hypermarkets performance is really being bolstered
by smaller format stores rather than larger scale, as these stores become an
alternative to declining city center supermarkets that are closing down.
Private label is falling behind market growth as Discounters focus on brand listings in
the near-food sector which includes products in health, beauty and homecare. The
Drugstores, whose growth is lower than in the previous year, are also feeling the
effects of Discounters focusing on branded listings. Additionally, less new Drugstore-
openings push the market growth.
Year 2019 starts with an unprecedented brand promotion strategy of Aldi which drives
the market immediately into a new “price war” for main food brands. If nobody counter
steers with innovative solutions, this war could end in losses for retailers and
manufacturers - consumers could be the benefiting third party.
87 87 86 87 87 84
102 103108 107 106 104
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU DE
2.72.8
2.01.9
1.2
0.6
1.7 1.6
1.3
1.92.1
2.0
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
Jens Olig
Managing Director
Austria, Germany,
Switzerland
24
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TOTAL GERMANY – CHANNEL PERFORMANCE
FMCG sales flattened in Q4 with a weaker Christmas season - increased
prices levelled consumption declines
Small Hypers are the main growth drivers due to store expansion as city-
centre small supermarkets decline. Drug Stores growth comes from
strong assortment offering and strength of private label.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
2.0%
2.9%
0.7%
1.4%
2.5%
Total FMCG Hypermarkets Supermarkets Discounters Drug Stores
41%
8%
41%
10%
2.7% 2.2%
1.3%
2.9%
3.1%
3.2% 3.6%
2.1%
1.8%1.2%
-0.6% -0.2%
-2.0%
0.0%
-1.1%
0.9%1.0%
-0.8%
0.7%
-1.2%
2.1% 2.0%
-0.7%
2.9%
2.0%
4.1%4.6%
1.3%
2.5%
0.0%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Germany
Unit Value Growth Volume Growth Nominal Value Growth
25
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TOTAL GERMANY – SUPER CATEGORIES PERFORMANCE
TOTAL GERMANY – MANUFACTURER PERFORMANCE - FMCG
Private Label share declines are driven by increased branded listings and
branded promotions in Discounters. In other channels PL is making small
improvements (0.6 %).
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
Beverages profit from sunny weather conditions, additional Beer from soccer
world cup, while confectionery is suffering.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Food Ambient 17.3%
Dairy 12.0%
Non Alcoholic Beverages 11.8%
Alcoholic Beverages 10.5%
Confectionery 9.9%
Fresh Food Selfservice 9.1%
Personal Care 6.8%
Household Care 6.8%
Tobacco 6.1%
Frozen Food 5.6%
Pet Food 1.6%
Baby 1.5%
Health Care 1.0%
2.0%
1.8%
4.4%
3.6%
3.9%
-1.0%
-0.1%
2.1%
1.0%
2.8%
3.4%
-0.7%
-5.0%
2.6%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 7.7%
Top 6-10 5.5%
Top 11-30 9.7%
Top 31-100 14.3%
100+ 22.6%
Private Label 40.2%
2.0%
0.7%
2.2%
3.3%
2.4%
3.8%
0.9%
26
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IRELAND SNAPSHOT
Ireland enjoyed strong economic performance throughout 2018 with unemployment
hitting an 11 year low of 5.3% in December and the FMCG market posting an annual
value growth of 2.5%, up from 1.9% in 2017.
However, despite the strong annual performance, the months from October to
December, ring a note of warning. Although consumer confidence remains high, it
fell five points to 106 in the final quarter of the year. Retail volume, the key driver of
growth throughout the first three quarters, fell sharply from a high of 2.7% to 0.8% at
the end of the year. With prices remaining static, retail value growth was below the
full year average at only 1.3%.
As we begin 2019, the uncertainty around Brexit has already begun to impact
consumer confidence as well as consumption and spending levels. Spend levels for
Christmas 2018 were subdued indicating a new cautiousness in consumer spending
behaviour. There is much attention on the potential impact of Brexit on the supply
chain and to pricing in the retail and grocery sector, and with no clarity as to what
this impact will be it is likely to continue to dampen consumer sentiment and
spending levels for the foreseeable future.
The outlook for the Irish economy and retail sector remains positive. However, given
the uncertainty surrounding Brexit, businesses, retailers and brand owners need to
be ready for all eventualities. Planning for supply chain, pricing and potential range
impacts is key to enable navigation of the market in the months ahead. Repeating
the growth seen in 2018 is going to be a challenge. Retailers and brands will need
to remain focused on addressing changing consumer needs, particularly around
sustainability and health, in order to differentiate and stay ahead. With health
remaining the top consumer concern, this area offers an opportunity for growth,
particularly in the first part of the year when shoppers are more focused on eating
and living more healthily.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) GDP Q4 forecast
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
87 87 86 87 87 84
103 103 103108 111
106
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU IE
13.1
5.4
10.0
8.7
5.0
2.80.1 0.5 0.5 0.4 0.8 0.9
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
Paul Walker
Managing Director
United Kingdom & Ireland
27
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TOTAL IRELAND – CHANNEL PERFORMANCE
2018 full year performance was strong but the prolonged uncertainty
surrounding Brexit has seen consumer confidence and consumption levels fall
sharply in Q4.
All channels remain in value growth but with Discounters ahead of Multiples
thanks to price inflation and volume growth.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
*Multiples = Multiples & Dunnes
47%
33%
20%2.5%
2.2%
2.4%
3.5%
Total FMCG Multiples Convenience Discounters
0.1%
0.9%
-1.5%
0.2%1.4%
0.1%
1.8%0.8% 0.4% 0.5%
1.9%
1.6%
1.2%
3.5%
0.4%
2.4%
2.3%
1.0%
2.7%0.8%
1.9%
2.5%
-0.3%
3.7%
1.9%
2.5%
4.1%
1.8%
3.1%
1.3%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Ireland
Unit Value Growth Volume Growth Nominal Value Growth
28
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Confectionery remains the category with the strongest growth buoyed by the
2018 Christmas season, with soft drinks remaining the key driver within this
category.
TOTAL IRELAND – SUPER CATEGORIES PERFORMANCE
MAT Q4-2018 MAT Q4-2018
* NB. Soft drinks are included in Confectionery super category
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Confectionery 22.5%
Alcohol 18.2%
Chilled 16.5%
Tobacco/Sundries 13.0%
Ambient 10.1%
Household 5.3%
Bakery 5.1%
Health & Beauty 4.5%
Frozen Food 3.2%
Pet Food 1.6%
2.5%
6.1%
2.9%
1.1%
3.6%
-0.6%
-0.5%
0.6%
0.5%
1.2%
0.8%
29
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ITALY SNAPSHOT In Q4 2018, Italy’s GDP growth slowed to -0.2% versus the previous quarter. The
average annual GDP growth for 2018 was just 0.1%, but consumers in Italy are
increasingly optimistic, with the Consumer Confidence Index growing from 69 to 70
points over the last two quarters and up two points compared to Q4 2017.
Nevertheless, the employment rate is stuck at 58.8%, with increasing seasonal
jobs and self-employment, while permanent contracts keep decreasing.
As far as FMCG retailers’ performance is concerned, figures are still positive: 2018
closes with a volume growth of +0.8% for the year and an increase in prices of
0.9%, leading to an overall value sales growth of 1.7% in comparison with 2017
TY, confirming the fourth year of consecutive growth. Discounters (5.0%) and Drug
Stores (6.6%) are the most dynamic formats, as they match consumers’ increasing
need for convenience.
There is still evidence that growth is driven by consumer spending in food
categories, and mainly by fresh grocery (4.7% for 2018) that accounts for 29.3% of
total FMCG spending. The news is that Home care and Personal care categories
have started to grow again. Among CPGs manufacturers, small brands and private
labels outpace market leaders and follower brands. In particular, those brands are
winning the preferences of Golden Shoppers, Italian high-income and trendsetter
consumers. 2019 will be a turning point for major companies, where they should
not chase every new trend, but rather invest more strategically in digitalization, be
it e-commerce or simply the improvement of in-store experience.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD for Q4 2018
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Roberto Pedretti
Managing Director,
Central & Southern
Europe
87 87 86 87 87 84
6568 66
6269 70
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU IT
1.7
1.6
1.4
1.2
0.8
0.1
1.3
1.1
0.8
1.0
1.51.4
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
30
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TOTAL ITALY – CHANNEL PERFORMANCE
Growth is driven by consumer spending in food categories, mainly by
fresh grocery. The news is that Home Care and Personal Care
categories have started to grow again.
Special mention to Discounters: beyond opening 170 new stores in 2018,
the channel is improving services to compete with supermarkets; with
fresh food now accounting for more than 50% of its performance.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
1.7%
1.1%
1.2%
-2.4%
5.0%
6.6%
Total FMCG Hypermarkets Supermarkets Convenience Discounters Drug Stores
27%
38%
12%
18%
5%
0.9%
0.7%
0.9%0.6%
1.3%0.7%
1.0%
1.3%0.3%
0.8%
-0.5%
3.1%
2.6%1.7%
2.4%
-0.7% 0.0%
1.2%
1.7%
0.2%
4.0%
3.1% 3.1% 3.1%
0.3%
1.3% 1.4%
MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Italy
Unit Value Growth Volume Growth Nominal Value Growth
31
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Fresh, ready-to-go and wellness-related products, as well as “self
rewarding” foods like gourmet specialties, are the best-performing products.
Evolving trends evident in wholemeal and organic products.
TOTAL ITALY – SUPER CATEGORIES PERFORMANCE
TOTAL ITALY – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
Among CPGs manufacturers, small brands and private labels outpace market
leaders and follower brands, catching new trends and needs in a faster way.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Packaged Food 29.9%
All Fresh 29.3%
Beverages 14.2%
Personal Care 9.9%
Home Care 7.7%
Frozen 5.4%
Pets 2.0%
Light Bazaar 1.3%
Heavy Bazaar 0.2%
Textile 0.1%
1.7%
-0.1%
4.7%
1.4%
0.4%
0.1%
1.8%
1.6%
-2.3%
4.4%
-4.5%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 9.9%
Top 6-10 5.6%
Top 11-30 11.9%
Top 31-100 13.6%
100+ 32.2%
Private Label 26.8%
1.7%
0.4%
-1.3%
-0.9%
-0.1%
3.3%
2.9%
32
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3.03.1
3.12.9
2.3
1.8
1.5 1.41.2
1.6
2.0 2.0
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
ECONOMY WATCH
NETHERLANDS SNAPSHOT
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX
Source Economist Intelligence Unit (EIU) OECD Q4 2018 The Conference Board® Global Consumer Confidence Survey
is conducted in collaboration with Nielsen.
After a huge jump in the previous quarter to 112 points, Dutch consumer confidence
declined in the fourth quarter to 105 points, but is still well above the European average of
84.. One of the major causes of the decline was decreasing optimism in job prospects,
which went from 68 points in Q3 to 56 points in Q4. According to the Centraal Bureau
voor de Statistiek, confidence in job prospects declined despite an increase of 49,000
jobs during the fourth quarter, with the ratio of job vacancies per unemployed (80 per 100)
at a new high.
After a spike in volume sales during the third quarter, FMCG volume sales contracted
again slightly during Q4 (-0.5%), ending the last 12 months at flat volume growth. Price
increases (2.3% for the quarter, and 2.7% for the full year) compensated for the drop in
volume, with nominal growth at 1.7% (quarter) and 2.6% (2018).
When looking at the full year results, the Food channel (including e-commerce) showed
the strongest growth — up 2.9% for 2018. This trend is in large part due to the prolonged
summer that even impacted the October month. The Petrol channel experienced a 2.4%
growth, in part due to the transformation of some petrol stations into mini “supermarkets.”
When diving deeper into categories, we’re still seeing the knock-on effects of the
prolonged summer on our MAT results: Beverages (up 3.7%) and Frozen Foods (5.8%)
show some of the most pronounced growth, due to the warm weather — with salads,
deodorant and ice cream showing a significant uplift. The top 5 manufacturers and
private label were the big winners for the year, seeing 4.2% and 3.4% growth
respectively. Private Label continues to grow because of Fresh — with “Verspakketten,”
meal packages containing all the fresh ingredients needed to make a full meal, seeing the
strongest volume growth within Vegetables.
As we head into the end of the first quarter, we expect the VAT increase that went into
effect in January (from 6 to 9%, making things like groceries more expensive) to have a
minor impact on FMCG growth. Nevertheless, manufacturers and retailers alike would be
wise to examine their pricing strategies to ensure they retain their shopper loyalty
throughout this change.
Pedro Lima
Managing Director
Belgium,
Netherlands
87 87 86 87 87 84
101 101 101106
112105
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU NL
33
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2.6%
2.9%
0.8%
2.4%
Total FMCG Food Drug-Perfumery Petrol
TOTAL NETHERLANDS – CHANNEL PERFORMANCE
After a spike in volume sales during the Q3 warm weather, volumes decline again —
with price increases compensating for volumes in overall market growth.
Food channel shows strongest growth, with prolonged summer (extending into
October) having a positive impact into Q4.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
*Total FMCG includes e-commerce from January 2016
2.8%2.7%
5.8%
2.4%
3.3%
3.5%
3.4%
2.7%
2.0%
2.3%
-0.3% 0.0%
-1.4%
1.2%
-0.4%
0.2%
-0.8% -0.6%
1.7%
-0.5%
2.5% 2.6%
4.4%
3.5%
2.8%
3.7%
2.7%2.1%
3.8%
1.7%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
NetherlandsUnit Value Growth Volume Growth Nominal Value Growth
85%
11%4%
34
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TOTAL NETHERLANDS – SUPER CATEGORIES PERFORMANCE
TOTAL NETHERLANDS – MANUFACTURER PERFORMANCE - FMCG
Private Label continues to grow due to Fresh, with convenience items like
“Verspakketten” showing tremendous growth potential.
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
In addition to Beverages and Frozen Foods, which grew strongly due to the
warm weather, salads and deodorant also showed a significant uplift.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Beverages 24.1%
Other Shelf Stable Food 17.9%
Personal Care 13.5%
Confectionery 11.4%
Dairy 11.3%
Tobacco 11.2%
Frozen 5.1%
Home Care 3.5%
Margarine/Butter/Fat 2.0%
2.6%
3.7%
1.2%
2.4%
1.1%
4.1%
2.0%
5.8%
1.7%
2.5%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 16.7%
Top 6-10 6.7%
Top 11-30 13.8%
Top 31-100 16.5%
100+ 26.7%
Private Label 19.6%
2.6%
4.2%
1.1%
2.7%
2.3%
1.7%
3.4%
35
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NORWAY SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD Q4 2018
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Cecilie Westh
Managing Director
Nordics
The last quarter of 2018 continued the trend we have seen during the year, value driven
growth - and where we now also see that the volume growth is slightly declining for the
first time since Q1 2017. The whole second half of 2018 has been driven by price
increases caused by tax-regulations on sugar-containing products like confectionaries,
beverages and ice cream. The influence on the total value growth is big, but the volume in
the categories are flat.
The new taxes in combination with and together with “free import of deliveries below $42 ”
gives the national brick and mortar stores high competition, and even though there are not
any available numbers for Q4 yet, it is reason to believe that it is still increasing. The
Norwegian government has now had a hearing with the industry, and will review initiatives
to reduce this border trade. At the other end of the scale - we’ll find big categories in
health and beauty, household products and other noon food products - and for the full
year bricks and mortar (B&M) grocery stores have lost more than 66 million dollars
compared to last year. We have defined these three areas as the main drivers for
expanding competition as: 1) E-commerce 2) Border trade 3) Dollar Stores
Our recent report Shopper Trends report 2019 shows that 54% of the respondents have
purchased food and groceries in a “Dollar store" over the past six months. Most of them
shopping in Europris, the largest player in this channel. Europris has had positive
development in 2018 and has grown by 7.3% compared to last year, adding eight new
stores to the chain during 2018. Other chains like Normal have also opened in many new
locations throughout 2018.
The B&M grocery stores are fighting back with EDLP strategies, and the market share for
total EDLP products is now up to 66.5%. With so much happening, it would be wise for
industry players to acknowledge that the competitive environment has changed and re-
visit their positioning given the growing influence of factors like cross border and e-
commerce. Actions in assortment, pricing and channel shifting would be worthwhile
considerations for some to define their own space on the chessboard.
87 8786
87 87
84
90
86
89
92
94
89
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU NO
3.8
2.0 1.9
1.5 1.61.8
1.51.3
2.0
2.4
3.3 3.4
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
36
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TOTAL NORWAY – CHANNEL PERFORMANCE
FMCG performance driven by price increases as a result of new taxes
on sugar containing products.
EDLP is driving the performance of bricks and mortar grocery stores, but
they are under hard pressure from online, border trade and “dollar stores”.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
1.9%
2.6%3.5%
-0.7%
0.8%
1.8%2.0% 1.7%
2.4%3.2%
0.1%
0.1%
-1.4%
2.4%0.9%
0.7%0.8%
0.5%
0.7%
-0.5%
2.0%
2.7%
2.1%
1.6% 1.6%
2.5%2.8%
2.2%
3.2%2.7%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
NorwayUnit Value Growth Volume Growth Nominal Value Growth
6%
29%
55%
11%2.7%
1.1%
2.3%
3.4%
1.4%
Total FMCG Hypermarkets Large Supermarkets Small Supermarkets Superettes
37
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All super categories within food and beverages are growing, driven by confectionery and
beverages, while non-food (health & beauty and household products) are struggling.
TOTAL NORWAY – SUPER CATEGORIES PERFORMANCE
TOTAL NORWAY – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
The mid-tier manufacturers (top 11-30) and PL are driving the growth.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Fresh Food 28.9%
Beverages 16.2%
Packed Food 14.4%
Chilled Wares And Oils 13.1%
Tobacco 7.2%
Frozen Food 6.1%
Chocolate And Confectionery 4.9%
Wash And Housekeeping
Products4.0%
Health And Beauty 3.7%
Other Nonfood Products 1.0%
Pet Food / Pet Articles 0.6%
2.7%
1.5%
6.2%
3.0%
4.0%
1.1%
6.0%
5.0%
-4.2%
-3.6%
-1.8%
1.0%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 24.1%
Top 6-10 9.9%
Top 11-30 19.5%
Top 31-100 15.3%
100+ 3.6%
Private Label 27.6%
2.7%
2.1%
2.5%
4.1%
0.4%
0.5%
4.0%
38
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PORTUGAL SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD Q4 018
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Roberto Pedretti
Managing Director,
Central & Southern
Europe
FMCG in Portugal closed the year with a total growth of 2.8%. However, volume
for the year was half of that recorded in 2017, slowing down over the four quarters
of 2018.
In the last quarter of the year, FMCG registered a growth rate of 1.8%, which was
already very positive. As happened throughout the year, the dynamism of this
quarter was sustained by a positive price effect of 1.6%. In volume, this remained
stable (0.2%) in Q4 but growing slower than in the same period last year. We see
that Portuguese consumers are not buying more in quantity, but are buying higher-
priced categories or products, leading to a positive price effect.
In this quarter, the Portuguese consumer confidence index reached 87 points
(three above the European average) and the Nielsen “Changing Consumer
Prosperity” report shows that almost half of the Portuguese have improved their
financial situation in the last five years, spending more on Food and Household
Care. The purchase of premium products is growing among Portuguese
consumers, who, considering their increasingly busy lifestyles, are more
concerned with health and wellness, as well as a more balanced and happy life,
with more free time for their favourite activities.
FMCG growth (leveraged by a positive price effect) is proof that consumers are
open to buying products that offer them the benefits they seek, even with higher
prices. However, although value growth continues to be good, sustained by the
price effect, the same growth does not occur in volume. The scenario in Portugal
remains positive, but the trend is slowing down. The market should take into
account that it will be increasingly difficult to grow in volume. The population is not
increasing and consumers have more money to spend, are more confident and,
for this reason, are spending differently including an increase in out of home
consumption. It is essential to reduce the dependence on promotions (which
continued to grow in 2018, reaching 46% of sales), focus promotions on premium
products in order to encourage purchase, and invest in higher quality products.
87 87
8687 87
8485 84
90
85
92
87
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU PT
2.5 2.5
2.22.4
2.1
1.7
1.3
1.8
0.9
1.31.4
0.8
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
39
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TOTAL PORTUGAL – CHANNEL PERFORMANCE
Portuguese are not buying more quantity, but are buying higher-priced
categories or products, leading to a positive price effect and growth in value.
The trend remains stable, with smaller store formats more dynamic, as
consumers look for greater convenience in their shopping experience.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
2.8%
1.7%
3.1%
3.9%
Total FMCG Hypermarkets Supermarkets Superettes+Traditionals
26%
66%
8%
3.0%
2.3%1.2%
2.4% 2.8%3.8%
3.0%1.6% 2.2%
1.6%
1.2%
0.6%
0.3%
3.7% 0.2%
2.9%1.1%
1.0% 0.6%
0.2%
4.3%
2.8%
1.6%
6.1%
3.0%
6.7%
4.1%
2.7% 2.8%
1.8%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Portugal
Unit Value Growth Volume Growth Nominal Value Growth
40
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TOTAL PORTUGAL – SUPER CATEGORIES PERFORMANCE
TOTAL PORTUGAL – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
Frozen products bring greater convenience and are growing strongly.
Consumers are more open to innovation and to try new brands, leading to the
growth of smaller manufacturers.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Grocer Products 38.6%
Dairy Products 17.8%
Personal Care 11.0%
Alcohol Drinks 10.7%
Household Care 8.1%
Non Alcohol Drinks 6.9%
Frozen Products 6.9%
2.8%
3.5%
1.8%
1.3%
3.3%
2.9%
2.0%
4.6%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 16.1%
Top 6-10 7.8%
Top 11-30 14.7%
Top 31-100 13.1%
100+ 15.4%
Private Label 32.9%
2.8%
2.3%
1.0%
3.8%
4.2%
4.3%
1.9%
41
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SPAIN SNAPSHOT The expectations of the Spanish economy have been revised downwards due to the
slowdown centred on consumption and exports, as well as the reappearance of some
uncertainties, both external and internal. However, employment continued to increase
throughout the fourth quarter. Whilst it is anticipated by a number of economic sources
that the Spanish economy will continue to grow in the coming years it will not be at the
same levels. GDP is expected to grow by 2.4% in 2019 and, in this scenario, job
creation is expected to continue, which is good news for consumption.
Regarding FMCG, the last quarter of 2018 remained almost stable (-0.2%) in terms of
volume. The increase in prices in recent months showed nominal growth of 2.2% this
last quarter. The overall annual picture remains quite positive, with total annual value
growth of 2.9%, which is basically explained by unit value growth.
In a context of increasing competition between retailers, there has been strong
investments in new stores and the renewal of existing ones. The competition has
extended to national brands and private labels, which represent 40% of the value
market share, and growth looks to become increasingly challenging. Although volume
sales are stable, it is key to look for opportunities in those areas that are covering the
best needs and aspirations of consumers: health and wellbeing, convenience,
premiumisation - key elements that explain the positive performance of some segments
or categories.
Innovation continues to be an indispensable lever to accelerate market dynamics and
the Spanish consumer has always been willing to accept new product proposals.
Investment in innovation is key for both manufacturers and retailers and cooperation is
essential to ensure success in launching new products. Another critical opportunity (and
a must) for FMCG operators is digitalization. The digital shopper is demanding omni-
channel access as consumers no longer solely visit physical or online. They want the
best possible access depending on the occasion. Investments in the opening of new
stores will increasingly be replaced by a greater focus and resources devoted to
technology. The shopping experience should no longer be an attribute of the store, but a
multichannel priority. Finally, manufacturers and retailers will have to adapt their
offerings to an older population increasingly concentrated in large cities, where they
have access to better quality services.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX
Source Economist Intelligence Unit (EIU) OECD GDP Q4 2018
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
ECONOMY WATCH
Roberto Pedretti
Managing Director,
Central & Southern
Europe
87 8786
87 87
84
91
93
91 92
97
94
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU ES
2.93.1
2.8
2.5 2.4 2.4
1.9
1.6
0.9
2.02.2
1.7
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
42
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TOTAL SPAIN – CHANNEL PERFORMANCE
Market stability in terms of volume but growth opportunities in categories /
segments better addressing consumer preferences.
Supermarkets become the fastest growing channel, supported by strong
investments in new and existing stores.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
15%
80%
5%
1.8%2.8%
0.6%1.1%
1.9%1.7% 2.2%
3.9%
2.0% 2.4%
2.1%
0.1%
1.8%
2.6%2.4%
3.5%
0.9%
-0.8%
1.2%
-0.2%
3.9%
2.9%2.4%
3.7%4.3%
5.2%
3.1% 3.1% 3.2%
2.2%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Spain
Unit Value Growth Volume Growth Nominal Value Growth
2.9%
-1.7%
3.8%
2.7%
Total FMCG Hypermarkets Supermarkets Drug Stores
43
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Convenience and health are two key drivers behind some categories
positive performance.
TOTAL SPAIN – SUPER CATEGORIES PERFORMANCE
TOTAL SPAIN – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
Due to private label upturn in 2018 second half, manufacturers continue
investing in promotion as a way to make their products more accessible to
consumers.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Packaged food 25.3%
Drinks 15.2%
Health & Beauty 12.0%
Cooked meats 8.5%
Household 8.4%
Canned food 6.4%
Frozen 5.5%
Dairy 5.2%
Milk & shakes 4.8%
Cheese 4.6%
Ready meal 4.1%
2.9%
3.3%
2.2%
1.9%
4.0%
2.5%
2.8%
3.3%
1.2%
0.5%
3.6%
8.5%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 10.5%
Top 6-10 5.2%
Top 11-30 11.6%
Top 31-100 9.7%
100+ 21.9%
Private Label 41.1%
2.9%
-1.1%
0.7%
0.6%
1.3%
2.9%
5.3%
44
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SWEDEN SNAPSHOT
Throughout October to December, Sweden showed a slowdown in FMCG with nominal
growth at 2.5%, down from 3.3% in the previous quarter. Volume growth has stabilised
after significant price increases across 2017.
The general election was not finalised until January 2019, causing uncertainty in Q4 for
the political direction of the country. In addition, the Riksbank announced interest rate
increases and inflation rose to the highest level in years. Both events caused Swedes
to increase savings and to feel less confident, as evidenced by the Consumer
Confidence index down from 100 in Q3 to 95 in Q4.
Within FMCG, volume consumption bounced back in the last quarter, but annual
performance is still suffering from last year’s price increases. The Swedish shopper
seeks value for money, reflected by the performance of Discounters - leading growth in
FMCG.
Dairy, Beverages and Frozen food are continuing to show strong growth in Q4 as in the
full year. Super categories in decline are Household products, caused by channel
switching to Bargain stores, and confectionery caused by the continued trend toward
health. Private Label is still hot in the Swedish grocery trade, growing faster than the
market together with larger brands. 32% of the Swedish shoppers say they would
change to cheaper grocery brands to save on household expenses.
Swedes increased their savings in Q4. To save on household expenses, switching to
cheaper grocery brands is in the top five actions for the Swedes. Higher promotional
pressure presents a challenge for both manufacturers and retailers to win a larger part
of the shopper’s wallet. Despite lots of e-commerce buzz, grocery online shopping is
behind other categories (like travel and books) and the physical store is not dead - the
battle remains in the store!
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q4 2018 OECD
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Cecilie Westh
Managing Director
Nordics
87 8786 87 87
84
9897
99 99100
95
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU SE
2.62.7
3.3
2.6
1.7
2.42.2
1.8 1.71.9
2.1 2.1
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
45
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TOTAL SWEDEN – CHANNEL PERFORMANCE
FMCG volume growth fell to 0.9% in Q4 due to price increases
The market is driven by the strong performance of Discounters. The
growth in Superettes is driven by new stores.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
37%
31%
20%
6%
6% 3.0%
3.0%
3.2%
2.3%
4.2%
4.4%
Total FMCG Hypermarkets Large Supermarkets Small Supermarkets Superettes Discounters
2.6%
1.8%0.8%
1.8%
3.1%
3.4%2.6%
1.6%0.9%
1.5%
-0.1%
1.2%
-1.2%
1.6%
-0.4%
0.7%
0.7%
1.8%2.4% 0.9%
2.5%3.0%
-0.4%
3.5%
2.7%
4.1%
3.4% 3.3% 3.3%
2.5%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Sweden
Unit Value Growth Volume Growth Nominal Value Growth
46
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Strongest growth came from higher prices in Dairy and the extreme summer
driving consumption in Frozen Food and Beverages. Health & Beauty is
declining driven by channel switch to Bargain stores.
TOTAL SWEDEN – SUPER CATEGORIES PERFORMANCE
TOTAL SWEDEN – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
The biggest brands and manufacturers are challenged by Swedish shoppers
increasing demand for small local brands and Private Labels.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Packaged Food 24.5%
Fresh Food 20.7%
Dairy Products 19.9%
Beverages 10.4%
Frozen Food 9.2%
Household Products 6.8%
Health And Beauty 4.9%
Confectionery 3.7%
3.0%
2.9%
2.7%
3.5%
6.0%
7.1%
-1.8%
0.4%
-0.1%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 14.5%
Top 6-10 6.6%
Top 11-30 15.6%
Top 31-100 20.9%
100+ 16.5%
Private Label 25.8%
3.0%
1.0%
3.2%
3.0%
2.9%
2.3%
4.9%
47
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SWITZERLAND SNAPSHOT
The Swiss economy had experienced growth for five consecutive quarters: GDP had
been rapidly increasing, employment was on the rise, and consumer confidence was
strong. However in Q3 2018, this strong growth pattern was suddenly interrupted.
Switzerland is currently following a significant economic downturn, seen concurrently in
other European countries like Germany.
Mirroring these trends, the Swiss FMCG market showed a slight nominal value
decrease in Q4 — impacted by a -1.6% decrease in volume sales and counteracted by
+1.2% increase in price. The fresh categories, and in particular fruit, vegetables and
meat, declined compared to last quarter. However, 2018 remains a positive year for the
Swiss FMCG market overall, showing total nominal value growth of 0.6%. Small
Supermarkets and Discounters profited the most from this growth, while Department
Stores continue to lose relevance due to the rise in e-commerce.
Due to last year’s prolonged summer, Beverages were last year’s winning categories
with a nominal value growth of 2.2% for non-alcoholic and 1.4% for alcoholic beverages.
Dairy products and shelf-stable categories also showed growth of 1.5% and 2.1%
respectively, driven by small manufacturers (Top 11-100) and Private Label. The Top 10
manufacturers in comparison are losing relevance.
From 2019, the Swiss economy is expected to continue to normalize after the strong
expansionary phase of 2017 and 2018. However, despite the situation on the labour
market, which is due to remain positive overall, recent muted wage developments and
rising inflation are reducing households’ real purchasing power. This factor and also the
rise of Discounters will put more price pressure on retailers and manufacturers. We
therefore see price as one of the hot topics in 2019.
Going forward, we see great growth potential for retailers that focus on a wide range
and high quality fresh food, enjoyable shopper experiences and convenience.
Sustainability and food intolerances will continue to influence the product offering. Last
but not least, digitalization will continue to shape today’s shopper behaviour with new
opportunities for retailers and manufacturers to connect directly with the end consumer
and influence purchasing behaviour.
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) GDP Q4 2018
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
1.7
2.6
3.2 3.2
2.2
1.8
0.50.8 0.7
1.01.1
1.3
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
87 87 86 87 87 84
97 99104
99106
99
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU CH
Jens Olig
Managing Director
Austria, Germany,
Switzerland
48
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TOTAL SWITZERLAND – CHANNEL PERFORMANCE
Reflecting the significant economic downturn seen at the same time in other
European countries, the Swiss FMCG market shows a slight nominal value
decrease in Q4.
Supermarkets are superseding Hypermarkets as small formats such as Convenience
stores and Discounters grow quickly at the expense of Department stores.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
25%
33%
24%
13%
4%
0.5%1.7%
0.5% 0.5%
-0.1%
0.6%
1.2%1.8%
2.1%
1.2%
-0.3% -1.1% -2.8%
1.9%
-0.5%
0.7%
-0.7% -1.2% -0.6%
-1.6%
0.2%
0.6%
-2.3%
2.4%
-0.6%
1.3%
0.5% 0.6%
1.6%
-0.4%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
SwitzerlandUnit Value Growth Volume Growth Nominal Value Growth
0.6%
-0.4%
0.8%
1.6%
1.6%
-3.7%
Total FMCG Hypermarkets Large Supermarkets
Small Supermarkets Supermarkets Department Store
49
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Beverages are 2018’s winning categories. The prolonged summer with record
temperatures have supported this outcome.
TOTAL SWITZERLAND – SUPER CATEGORIES PERFORMANCE
TOTAL SWITZERLAND – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
Medium to small manufacturers (Top 11-100) are driving the industry by
nimbly adapting to consumer trends with agile product innovations.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Culinary Shelf-Stable & Other 18.8%
Butchery 16.3%
Dairy 13.5%
Fruits And Vegetables 12.4%
Alcoholic Beverages 7.4%
Confectionery 7.3%
Bakery 6.6%
Homecare/Pet Care 5.4%
Cosmetics 5.1%
Non-Alcoholic Beverages 5.1%
Sanitary 2.2%
0.6%
2.1%
-0.6%
1.5%
-0.5%
1.4%
-0.7%
0.9%
-0.9%
-0.1%
2.2%
0.8%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 6.6%
Top 6-10 3.5%
Top 11-30 7.3%
Top 31-100 8.4%
100+ 17.9%
Private Label 56.3%
0.6%
-1.9%
-0.4%
1.6%
1.1%
-0.4%
1.1%
50
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UNITED KINGDOM SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD
The months of October through December posted a significant slowdown in
FMCG with nominal growth at just 0.8%, down from 3.5% in the previous quarter,
and volume declines of -0.3%. The critical golden quarter sadly did not deliver as
the caution that crept in at the end of September continued with shoppers reigning
back their FMCG spend. Inflation also slowed across the economy and overall, it
was a slightly disappointing Christmas for the major supermarkets. However, the
full year view for FMCG is more positive, with total annual value growth of 2.1%
and volume growth of 0.4%, helped by a hot summer.
The continued uncertainty around Brexit looms large and consumer sentiment is
weakening. The worst case scenario is that we can anticipate some short term
disruption at the end of March/ early April to imported and fresh foods, with the
possibility that we may also begin to see shoppers stockpiling certain ambient
goods and a possible spike in inflation following new tariffs. However, an orderly
exit from the EU is equally possible, but regardless of the outcome, we are
entering uncharted territory.
There are two ways for manufacturers to unlock growth - maximise the frequency
of online shopping trips and drive incremental spend through key consumer
trends. The online channel grew by 8% in the last quarter of the year with one in
three households shopping online for groceries. It’s the committed online
shoppers that are driving the growth, therefore increasing the shopping frequency
of light shoppers presents a new opportunity for growth.
To help support this growth, the industry must simplify the shopping experience by
connecting the in-store experience with a mobile-first online experience to drive
greater penetration and conversion. It will also be important to leverage key
consumer trends such as health and sustainability, both in-store and online, to
unlock incremental category spend, as every little helps. 2019 presents some
unique challenges for the UK but with change comes opportunity.
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Paul Walker
Managing Director
United Kingdom & Ireland
1.9
1.5
1.21.3
1.51.3
2.7 2.8
2.52.3 2.3
2.2
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
87 87 86 87 87 84
99 96 96101 102 98
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU GB
51
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A slowdown in grocery spend in the final quarter was offset by the growth seen
over last year’s long, hot summer.
FMCG MARKET DYNAMICS
(weighted average)
2.1%
1.7%0.5%
3.2%
2.9%
1.8%2.0%
1.3%1.6%
1.1%
0.1%0.4%
-0.3%
0.4%
-0.9%
0.9% 1.0%0.6%
1.9%
-0.3%
2.2%2.1%
0.1%
3.7%
2.1%
2.8%3.0%
1.9%
3.5%
0.8%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
UK
Unit Value Growth Volume Growth Nominal Value Growth
52
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TOTAL UK – SUPER CATEGORIES PERFORMANCE
MAT Q4-2018 MAT Q4-2018
The growth in Beer, Wine & Spirits and Impulse goods such as confectionery and
snacks was helped by branded promotions
TOTAL UK – MANUFACTURER PERFORMANCE - FMCG
The UK’s medium-sized manufacturers are enjoying double digit growth.
MAT Q4-2018 MAT Q4-2018
2.0%
1.8%
0.7%
12.7%
2.4%
1.6%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
FMCG Total 100.0%
Fresh Food 35.5%
Impulse 11.6%
Beer, Wine & Spirits 11.5%
Non Food 8.4%
Tobacco 8.2%
Ambient Grocery 7.8%
Health Beauty Toiletries & Baby 7.7%
Household & Pet 5.4%
Frozen 3.9%
2.1%
2.0%
5.1%
5.3%
-2.3%
1.4%
1.3%
-1.0%
1.8%
5.1%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 53.3%
Top 6-10 8.9%
Top 11-30 16.0%
Top 31-100 13.4%
100+ 8.4%
2.0%
1.8%
0.7%
12.7%
2.4%
1.6%
*Private labels are excluded from manufacturer breaks, explaining difference in FMCG growth
53
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THE BIG PICTURE: EUROPE CENTRAL & EAST
Daniel Chorbadjian
Managing Director
Eastern Europe
Roberto Pedretti
Managing Director,
Central & Southern
Europe
East and central Europe continues to show positive signs of growth across
various markets and indicators. It may be that consumers and businesses are
cautious when it comes to speculating about the future in these markets, but
what about the last five years? Would there be consensus that things are more
positive versus five years prior?
In Eastern and Central Europe, consumers certainly have very fragmented views
on this highlighting the increasing differences between financial capabilities and
spending attitudes. Over half of consumers in Romania, Poland, Bulgaria,
Estonia, and Kazakhstan say they are better off than they were five years ago
which is much higher than the European average of 37%, and although most
East and Central markets are above this average, it is the large proportions in
these markets who are “in the same position” or worse off vs five years ago that
illustrates the gaps between consumers.
One example is Romania, which recorded the most positive response of people
saying they are better off across Europe at 61%. However there was also 24%
saying they were in the same financial position and 15% saying they were in a
worse financial position than five years ago and these high proportions of less
positive sentiment is present in all European markets. Although this is a
consumers opinion instead of a review of their actual finances its does suggest
that despite positive economic growth at a national level, increased prosperity is
not being spread evenly leading to highly fragmented consumer markets based
on spending ability.
The big differences in spending ability aligns with many of the “polar opposite”
trends that we have seen, such as the success of both hard discounters AND
specialty stores in many markets or the share increases at both a budget price
tier and a premium price tier in certain categories. Moving forward there are
many who believe that this stretching spectrum of consumer prosperity and
mindset will continue if not accelerate in Eastern and central European markets
meaning a more segmented approach to products and prices ought to be
adopted. Complicating this even further is that we know that shoppers will
sometimes shop from a constrained budget mindset one day and a “treat myself”
approach the next day depending on the occasion.
A simple response may be to provide options and alternatives across the quality,
benefit and price spectrums or to focus on one or a few segments. Regardless
of the approach, the increasingly complicated consumer landscape will
represent challenges and opportunities that need a closer, clearer and more
agile understanding of financial capability and the impacts on spending.
You can access the Changing Consumer Prosperity report here or you can
email regan.leggett@nielsen for questions.
54
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GDP and Inflation reflect % change per annum to Q4 2018 /latest available data
Source: Economist Intelligence Unit (EIU)/OECD/ local government sources
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
EUROPE CENTRAL & EAST AT A GLANCE
ECONOMIC PULSE OF CONSUMERS
AROUND EUROPE
The Conference Board® Global Consumer Confidence Survey is conducted in
collaboration with Nielsen measures perceptions of local job prospects,
personal finances and immediate spending intentions. Consumer confidence
levels above and below a baseline of 100 indicate degrees of optimism and
pessimism, respectively
Overall GDP growth has been solid while consumer confidence has
fluctuated due to the complex social and political environment across
the region.
CONSUMER CONFIDENCE INDEX
CONSUMER CONFIDENCE INDEX
GDP
(annual %
growth)
Inflation Q4 2018Q4 2018 vs
Q3 2018
-3.0 22.4 TURKEY 87 8
3.5 2.0 SERBIA 78 4
4.1 5.3 KAZAKHSTAN 83 4
2.3 1.1 GREECE 71 3
4.1 3.6 ROMANIA 101 3
4.0 2.2 SLOVAKIA 92 2
2.3 2.6 CROATIA 80 2
5.0 2.9 LATVIA 83 1
4.6 1.4 POLAND 105 1
4.2 3.7 ESTONIA 89 1
4.1 1.9 SLOVENIA 87 1
Q4 2018Q4 2018 vs
Q3 2018
GDP
(annual %
growth)
Inflation
BULGARIA 82 -10 3.1 3.1
UKRAINE 59 -5 3.4 9.7
CZECH REP. 107 -2 2.8 2.1
RUSSIA 65 -2 2.2 3.9
LITHUANIA 82 -1 3.6 2.5
HUNGARY 75 -1 4.9 3.2
BELARUS 66 -1 3.5 5.2
55
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4033
30
4338
3136
30
23
36
24
51
40
2631
4046
55
29
38 36 35
28
22
3033
16
33
22 26
4641
3432
20
33
51
35
0
10
20
30
40
50
60
EU BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
Putting into savings New clothes
22
15
28
9
2430
1720 19
15 16
9
23
1622
9 11
56
2321
2925
19 18
8
17
1013
2329
26
1812
2722 22
11
33
0
10
20
30
40
50
60
EU BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
The economy Increasing utility bills (electricity, gas, heating, etc)
Putting money into savings continues to be the number one action when
consumers have spare money.
WHAT ARE THE TOP 2 CONCERNS IN THE NEXT SIX MONTHS?
WHO’S SPENDING, SAVING AND INVESTING?
Type of concern
After living expenses, how is spare money spent
Bars reflect Q4 2018. Table shows comparison to Q3 2018
EUROPE CENTRAL & EAST AT A GLANCE
Bars reflect Q4 2018. Table shows comparison to Q3 2018
CONSUMER SENTIMENTS IN
EUROPE
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
EU BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
The economy 0 5 2 2 5 2 3 -1 0 4 -1 0 3 1 -1 0 2 -7 -1
Increasing utility bills (electricity, gas, heating, etc)3 -2 1 7 -2 -3 -2 0 0 8 8 8 -4 -5 3 3 11 -3 0
EU BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
Putting into savings 2 0 6 7 3 2 2 -4 1 -4 4 4 -2 -1 0 2 1 12 0
New clothes 0 -1 4 0 -2 5 -1 -3 1 0 -3 3 2 7 -11 4 4 14 2
56
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1.7%
6.9% 2.5%
1.8%
0.8%
1.5%
4.5%
6.3%
2.0%
3.3% 2.7% 3.7% 3.3% 3.8%2.0%
2.8%
26.9%
9.5%0.9%
5.4%
-1.8%
1.1%
-0.2%
1.6% 1.0%
-1.7%
0.4% 2.6%1.6%
4.9%0.8%
2.4%
-1.6% -1.2% -2.7%
6.6%
2.6%
12.3%
0.7%
2.9%
0.6%
3.0%
5.5%4.7%
2.4%
5.9%4.3%
8.6%
4.0%
6.2%
0.4%1.6%
24.2%
16.1%
BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
Unit value change Volume change Nominal growth
LOOKING THROUGH EUROPE CENTRAL & EAST
FMCG LENS
FAST MOVING CONSUMER GOODS MARKET DYNAMICS – Q4 2018
EUROPE EAST & CENTRAL – 18 countries
WHERE ARE THE FMCG GROWTH OPPORTUNITIES?
Average volume growth Q3 2018 & Q4 2018
Colour coding indicates growth or declining trend compared to same 6 month period year ago.
Average volume growth of Q3’18 & Q4’18 vs Q3’17 & Q4’17, except for Belarus. Belarus is compared with Average of Q1 & Q2 of 2018
Avg. volume growth decreasing versus last period
Avg. volume growth increasing versus last period
RUSSIA (+2.7%)
CZECH REP. (-2.1%)
ESTONIA (+1.3%)LATVIA (+3.5%)LITHUANIA (+1.4%)
UKRAINE (+7.5%)
ROMANIA (+4.8%)
BULGARIA (+1.1%)
TURKEY (-0.3%)
GREECE (+0.6%)
POLAND (+2.7%)
SLOVAKIA (-0.3%)
HUNGARY (+2.1%)
BELARUS (+6.1%) KAZAKHSTAN (-2.6%)
*BL = Belarus
BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
SERBIA (+1%)CROATIA (+1.3%)SLOVENIA (-0.5%)
57
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BELARUS SNAPSHOT
While Belarus did not reach the forecasted GDP growth of 3.5% for 2018, World Bank
analysts still regarded the 3% growth as a recovery. However to ensure sustainable
growth, it has been suggested Belarus should increase resources efficiency, simplify
business conditions, encourage investment and strengthen trust in state institutions or
else it is unlikely that 2019 GDP growth will exceed 2.5%. The industrial sector was
the major contributor to lower than expected growth as well as low business activity
and an unfavourable investment climate.
However, retail performance was a strong contributor towards the economy driven by
significant wage growth and consumer lending. There is some concern from the
government and National Bank that as wage growth is outpacing labour productivity it
creates risk of an economic slowdown. Belarus continues to be economically
dependent on Commonwealth of Independent States (CIS) countries, especially
Russia and low growth in these neighbouring countries is hindering Belarus’ potential
economic outlook.
FMCG performance remained strong throughout 2018, driven by both strong
consumption and increased prices. There has been much activity in the FMCG retail
landscape with a number of large mergers and acquisitions which has resulted in the
strengthening of big players. This has created increased competition in FMCG
whereby retailers are enhancing their offerings to provide unique and additional value
propositions such as ready-to-cook and ready-to-eat meal options., New players that
have emerged in DIY, Drogery, e-commerce and Kids segment.
In this context, we see the opportunities for retailers and manufacturers to capitalize
on the increased spending power of consumers and to focus on solutions which add
value and help consumers satisfy their needs for fast and convenient products even if
they need to pay more. The premium segment deserves the attention of both
manufacturers and retailers in this environment and it is important to understand which
products consumers are prepared to pay a premium for if we want to unlock their
potential.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source: GDP and Inflation; & National Statistics Committee of Belarus
Vaios Dimoragas
Managing Director
Ukraine and Belarus
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
2.9
4.3
5.1
3.9 4.0
3.5
5.44.9 4.9
4.5
5.05.2
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
87 87 86 87 87 84
63 60 6067 67 66
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU BL
58
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TOTAL BELARUS – CHANNEL PERFORMANCE
Convenience and proximity are the key drivers of shopping in Modern Trade
grocery channel, which is contributing most to overall growth.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
While FMCG volume growth has slowed in Q4, overall growth keeps pace driven
by increasing prices.
5.0%
2.4% 4.1%
5.5%
6.9%
6.2%
5.7%
8.0% 6.9%
5.4%
11.3%
8.1%
12.1% 12.3% 12.3%
MAT TY Q1 18 Q2 18 Q3 18 Q4 18
Belarus Unit Value Growth Volume Growth Nominal Value Growth
52%
29%
6%3%
10%11.3%
10.2%
15.6%
2.2%
16.8%
8.5%
Total FMCG Hyper/Supermarket (Food Categories)
Groceries Modern Trade (Food Categories) Groceries Traditional Trade (Food Cat)
Kiosks + Other Markets (Food Categories) Drug Categories
59
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TOTAL BELARUS – SUPER CATEGORIES PERFORMANCE
TOTAL BELARUS – MANUFACTURER PERFORMANCE - FMCG
Private labels show significant growth supported by new launches and an
increasing number of stores for key retailers.
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
Coffee, Dairy and Snacks grow mostly due to price increases, while Home care
(Laundry detergents) increases sales value with innovative product forms.
11.3%
10.0%
18.8%
6.3%
7.5%
10.6%
6.7%
17.7%
10.2%
14.9%
9.8%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 29.9%
Top 6-10 11.1%
Top 11-30 26.7%
Top 31-100 19.5%
100+ 6.7%
Private Label 6.2%
11.3%
13.2%
10.0%
7.8%
12.4%
3.1%
28.4%
11.3%
13.2%
10.0%
7.8%
12.4%
3.1%
28.4%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Beer 24.6%
Beverages 20.7%
Dairy 11.7%
Chocolate 11.5%
Coffee 9.6%
Personal Care 7.8%
Snacks 5.5%
Candies 4.7%
Home Care 2.3%
Grocery 1.6%
11.3%
10.0%
18.8%
6.3%
7.5%
10.6%
6.7%
17.7%
10.2%
14.9%
9.8%
60
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COUNTRY HIGHLIGHTS
BULGARIA SNAPSHOT
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q4 18 estimates
Svyatoslava Svyst
Managing Director
Bulgaria / RV Leader
Eastern Europe
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
87 8786
87 87
84
8889
81
85
92
82
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU BG
4.3
3.43.5
3.2
2.7
3.1
1.6
2.7
2.0
2.6
3.5
3.1
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
Bulgaria’s economy has remained stable with GDP growth at 3.1% in Q4 2018
and unemployment at the lowest level of the last decade (4.7%). Household
consumption continues to be the driving force of the Bulgarian economy as
wages increase above the inflation rate. However, a mild slow down in
industrial production and exports in Q4 can be attributed to the uncertainty at
the European level (e.g. Brexit, Eurozone slow-down) Bulgarians’ confidence
has declined in the last quarter, across all measures, but particularly around
their optimism towards future job prospects. Traditionally Bulgarians are more
pessimistic in the last quarter of the year as winter approaches and utility bills
increase, but increasing inflation and slower wage growth are adding to a
growing cautiousness in the foreseeable future. Consumers concerns over
increasing food and utility prices could see consumers watching their everyday
expenses.
The FMCG market grew at a slower pace in Q4 (2.6% in value), which is still
optimistic considering that the last quarter of 2017 was the strongest of the last
several years. All major channels grew robustly over the year and household
care and snack food categories outperformed due to innovation and the
introduction of healthier alternatives. . Private label growth remains behind the
market, despite innovation in areas such as premium Christmas lines and
specialized brands (e.g. bio, vegan, non food).
Looking ahead at the retail landscape, no major expansion plans have been
announced by any of the top retailers, so to achieve growth, retailers and
manufacturers should have an intricate understanding of the way consumers
shop and what is important to them to achieve a bigger piece of the FMCG
pie. In an environment of rising costs, it is critical for retailers and
manufacturers to optimize their pricing and promotional strategy, in order to
ensure promotional focus is on the most sensitive products where rewards will
be greatest.
61
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TOTAL BULGARIA – CHANNEL PERFORMANCE
The FMCG market has slowed due to rising costs and unusually high growth seen in
Q4 2017.
All channels display positive trends, but wider assortment of premium products is driving
performance of Drug stores and large Food stores’ growth comes from store expansion.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
5.9%
5.3%
7.3%
8.1%
4.0%
8.8%
Total FMCG Supermarkets/Hypermarkets Extra Large Food Stores
Large Food Stores Traditional Trade Drug Stores
41%
13%
19%
23%
4%
2.4%2.9%
0.8%2.3%
3.2% 3.1% 3.3% 3.3%
2.4% 1.7%
4.4% 3.0%
3.1%
3.9%
4.6%6.7% 5.2%
3.7%
1.5%
0.9%
6.8%
5.9%
3.9%
6.2%
7.8%
9.8%
8.5%
7.0%
3.9%
2.6%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
BulgariaUnit Value Growth Volume Growth Nominal Value Growth
62
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All super categories are growing in value terms. Weather sensitive categories,
such as beer and non-alcoholic beverages saw slower growth in Q4.
TOTAL BULGARIA – SUPER CATEGORIES PERFORMANCE
TOTAL BULGARIA – MANUFACTURER PERFORMANCE - FMCG
Smaller manufacturers are performing better in this fragmented market.
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Chilled Products 25.4%
Alcoholic Drinks 18.3%
Confectionery 15.1%
Non Alcoholic Beverages 11.6%
Personal Care 7.2%
Household 7.1%
Salty Snacks 5.4%
Hot Beverages 4.3%
Shelf Stable Food 3.0%
Petfood 1.3%
Baby Categories 1.3%
5.9%
6.3%
3.8%
6.5%
3.5%
5.7%
9.1%
11.7%
4.0%
4.8%
16.1%
4.9%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 16.7%
Top 6-10 10.7%
Top 11-30 20.3%
Top 31-100 23.2%
100+ 26.1%
Private Label 3.0%
5.9%
6.7%
3.3%
8.5%
11.4%
0.3%
4.4%
63
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CROATIA SNAPSHOT
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source: DZS – Croatian Bureau of Statistics. The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Miroslav Tasic
Group Managing
Director Adriatic
Region
3.3
2.0
2.52.9 2.8
2.3
-0.5
0.8 0.5
1.9
1.4
2.6
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
The fourth quarter of 2018 highlighted a positive outlook for Croatia with increased
consumer spending and investments supporting the Croatian economy. However
weakness in industrial production and commodity exports caused GDP growth to slow
marginally (2.6%) versus the previous quarter (2.8%). On a less positive note, this
growth is stagnated by the continuous lack of commodity exports. Export growth is up
2.9% from 2017 however this is a considerably low figure considering that in 2017,
exports were up 12% versus the previous year. The second factor impacting Croatia's
GDP growth is the decline of industrial production mainly influenced by the 'Uljanik'
crisis (Croatian shipbuilder group). After labour strikes, loss of numerous prospective
deals and cancelation of previous contracts, Uljanik accounts have once again been
blocked and the crisis continues.
On a more positive note, personal consumption is still the main driver for growth, as the
retail trade industry shows its 52nd consecutive month of growth and we expect this
trend to continue as the average net salary of consumers increased by 2.8% versus
last year. The FMCG industry also portrays value and volume growth in the last quarter
in Croatia. This positive trend is further confirmed with the increase of consumer
confidence by two points in the last period and an optimistic sentiment with consumers
becoming more positive about job prospects and more willing to spend in the last
quarter. This was additionally strengthened by a strong Christmas spending season.
This rise in consumption also continues to strengthen the growth of Discounters in
Croatia. Once known only for their attractive prices and deep discounts, they are now
becoming specialized retailers in ‘theme’ based sales activities and in offering
shoppers’ exclusive brands. This strategy enables them to attract various consumers
from different income classes and age groups. It will be interesting to see how they will
continue to solidify their position in the Croatian market and what will occur when new
discounters enter the market.
Overall, amidst some negative trends in production and an increase in trade deficit that
has already impacted GDP growth, the continuous growth of domestic demand,
consumer spending and investment, presents a more optimistic look into what awaits
us in 2019. CPG players would do well to re-evaluate their position in a strong
consumer environment and ask themselves if they have defined themselves sufficiently
from the competition, as consumers seek offerings specific to their needs.
87 8786
87 87
84
7473
7779
7880
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU HR
64
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TOTAL CROATIA – CHANNEL PERFORMANCE
FMCG growth has picked up In the last two quarters of 2018 driven by
increased seasonal consumption and personal spending.
Discounters show the greatest growth with a focus on exclusive brands and
assortment expansion increasing the buyer base of price sensitive customers.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4 2018
**Drugstore channel is included in Large groceries (part of Traditional Trade)
. .
FMCG excludes Tobacco/Cigarettes
19%
33%
35%
1%
12% 1.9%
0.9%
2.9%
-1.0%
0.7%
10.1%
Total Croatia + Discounters Hypermarkets Supermarkets
Traditional Trade Kiosks/Tobacconists Discounters
2.9%
1.3%
2.5%
3.1%
3.5%
1.9%
0.5%
1.7%
1.2% 1.5%
0.0%
0.6%
-0.4%
1.3%
-0.3% -0.1%
0.6%
-0.9%
1.2%
1.6%
2.9%
1.9%2.1%
4.4%
3.2%
1.8%
1.1%0.8%
2.4%
3.0%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Croatia
Unit Value Growth Volume Growth Nominal Value Growth
65
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Despite varying strategies such as price decreases and product downsizing,
confectionery faces changing consumer behaviour towards healthier food options.
TOTAL CROATIA – SUPER CATEGORIES PERFORMANCE
TOTAL CROATIA – MANUFACTURER PERFORMANCE - FMCG
Negative performance of Top 1-5 manufacturers is mainly driven by local
dairy producers as the growth of private label increases.
MAT Q4 2018 MAT Q4 2018
FMCG: excluding Tobacco
.
MAT Q4 2018 MAT Q4 2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 20.7%
Top 6-10 12.3%
Top 11-30 21.8%
Top 31-100 15.5%
100+ 11.8%
Private Label 17.9%
1.9%
-0.6%
2.2%
-0.2%
2.6%
1.2%
6.9%
1.9%
-0.6%
2.2%
-0.2%
2.6%
1.2%
6.9%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Beverages 27.0%
Meat and meat products 16.5%
Dairy Products 15.2%
Confectionery 10.5%
Packed Food 8.6%
Personal Care 8.3%
Household Care 5.9%
Frozen Food 4.4%
Salted Snacks 3.0%
Baby Food 0.8%
1.9%
3.6%
0.9%
0.4%
-0.3%
2.4%
0.1%
3.0%
5.2%
4.7%
0.9%
66
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CZECH REPUBLIC SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD
Karel Tyra Managing Director,
Czech Republic
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
87 87 86 87 87 84
101 104108 108 109 107
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU CZ
5.1 5.0
4.1
2.4 2.3
2.82.5 2.6
1.92.3 2.4
2.1
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
Czech Republic finished another solid year with GDP growth at 2.8% for the
quarter but slower than 2017. Unemployment at 3%, has been one of the lowest
across the EU bolstering consumer optimism in job prospects and finances with
Czechs ranking as the second most optimistic nation in Europe. Confidence in
spending has fallen slightly in line with consumers’ increasing concerns about food
and utility prices.
In FMCG, the sector recorded 1.7% value growth for the year driven by increased
prices. Part of the price growth is connected with the growth of costs (commodities,
wages), but also premiumisation. Confident consumers are ready to spend more
money to trade up to more premium, luxury and convenient segments and
products. Health is considered to be the number one concern for Czech consumers
with a growing importance on leading healthier lifestyles. Not only are new
categories and segments entering the market, but more and more retailers are
dedicating space to these products that usually have higher margins. After almost
a decade without major shifts in the importance of retail channels, Hypermarkets,
despite still being the most important channel, continue to lose in favour of
Supermarkets, Discounters and Drug chains.
The key question and challenge for many players’ remains how to optimize
promotional spend. The Czech Republic is the leading EU country in promotional
dependency and this reliance continues to grow even now in times of prosperity.
Now is the right time to evaluate the optimal mix of regular and promotional prices
before any slow-down is on the horizon to secure higher margins and less
promotional wastage. As these channels become increasingly important to Czech
consumers who are looking to save money but also looking for convenient
offerings that save them time, it is critical for both retailers and manufacturers to
ensure their promotional strategies focus on the right mix of products to give
optimal returns. Understanding the optimal regular price tiers and promotional
support for products with price sensitivity is key to optimizing margins for both
retailers and manufacturers.
67
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TOTAL CZECH REPUBLIC – CHANNEL PERFORMANCE
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
Premiumisation is behind FMCG value growth rather than increased
consumption.
Czech consumers are becoming increasingly time poor and look to stores that
offer value and convenience
NB: 2016 and 2017 updates due to product enhancements, universe update, implementation of new chains and new categories with full history
1.7%
-4.9%
6.5%
8.5%
2.4%
6.4%
Total FMCG Hypermarkets Supermarkets Discounters Traditional Trade Drugstores
38%
18%
23%
13%
9%
4.9%
3.3% 3.4%
4.7% 6.0%
5.5% 3.8%
3.8% 3.6%
2.5%
-0.7% -1.6% -1.2% -0.3%-1.6% 0.0%
0.7%
-2.8%-2.5% -1.8%
4.2%
1.7%2.2%
4.4% 4.4%
5.5%
4.6%
1.0% 1.0% 0.7%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Czech Rep.
Unit Value Growth Volume Growth Nominal Value Growth
68
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Private label is gaining thanks to growth of Discounters and better
performance in Drug chains.
Healthier life-styles is driving performance of many categories where
premium offerings have been seen in commodities like flour with healthier
alternatives to personal care categories with therapeutic benefits.
TOTAL CZECH REPUBLIC – SUPER CATEGORIES PERFORMANCE
TOTAL CZECH REPUBLIC – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 15.3%
Top 6-10 8.1%
Top 11-30 18.0%
Top 31-100 21.0%
100+ 18.2%
Private Label 19.4%
1.7%
2.5%
1.6%
1.7%
1.0%
-0.3%
4.0%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Dairy 18.9%
Beverages Alcohol 17.2%
Sweets & Treats 14.3%
Health & Beauty 12.0%
Culinary - Shelf Stable 9.6%
Beverages Non Alco 8.9%
Beverages Hot 4.0%
Home Care excl. Laundry 3.2%
Pet Care 2.3%
Home Care - Laundry 2.2%
Infant Care 2.0%
Culinary - Frozen 1.8%
Frozen-Ice Cream 1.6%
Baking - Shelf Stable 1.4%
Culinary - Refridgerated 0.5%
1.7%
0.1%
6.5%
0.2%
1.6%
-2.0%
6.8%
-1.3%
1.7%
2.8%
-1.1%
-0.7%
-2.3%
17.0%
-9.1%
-6.6%
69
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ESTONIA SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source: OECD & Statistics Estonia
Ilona Lepp
Managing Director
Baltics
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
4.5
5.3
3.6 3.7
4.2 4.2
3.7 3.8
3.13.3
3.6 3.7
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
87 87
8687 87
84
8181 81
88 8889
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU EE
Estonia finished the year with a positive outlook and in good shape. Exports
increased by 12% and imports by 10% over 2018, while labour market indicators
also improved. The unemployment rate (5.4%) and the number of long-term
unemployed is the lowest it’s been over the last 20 years. However, inflation was
one of the highest in the EU at 3.7%, driven mostly by housing costs. Despite
this, thanks to growing incomes and a favourable job market, Estonian
consumers remain optimistic with the Consumer Confidence Index at 89 points -
eight points higher than a year ago and five points above the European average.
While the FMCG market finished slightly ahead for the year versus 2017, growth
was down this quarter compared to the last quarter. However there are positive
signals as the last two quarters growth has come from volume increases instead
of price inflation. Chilled and Frozen products (3.4%), Non-Alcoholic Beverages
(14.4%), Snacks (4.4%), Pet Care (3.2%) and Baby Food (6.6%) were driving the
growth in 2018.
Large and Small Supermarkets, the most important trade channels, continue to
grow faster than Hypermarkets and Superettes/Groceries. Whilst still a small
channel, consumer demand for convenience has increased sales in the
Convenience/Petrol channel by 15.1%. Despite rising prices, Private Label
declined, with both big and small manufacturers demonstrating solid growth, as
consumers seek more innovative products focusing on health and convenience
trends.
We anticipate that growth prospects for FMCG will remain positive thanks to
consumers rising incomes and confidence. Manufacturers and retailers should
leverage emerging convenience and health trends, but also take care not to
underestimate the importance of attractive pricing and promotions, as higher
inflation puts pressure on consumer spending.
70
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TOTAL ESTONIA – CHANNEL PERFORMANCE
Total FMCG volume has been growing for a second consecutive quarter, as the
decline in local alcohol sales has slowed.
Supermarkets are growing faster than Hypermarkets and Small Food stores due
to new store openings. Demand for convenience is fuelling the growth of Petrol
Stations/Convenience channel.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
* Backdata not available due to Universe Update
3.1%
0.5%
3.7%
4.9%
1.2%
15.1%
-0.4%
Total FMCG Hypermarkets Large Supermarkets
Small Supermarkets/Discounters Superettes/Groceries Conveniences/Petrol Stations
Drug Stores+Pharmacies
23%
33%
30%
11% 1%2%
3.4%
7.0% 6.6% 4.7% 3.8%
2.4%1.8%
-0.3%
-3.7% -4.0%
-1.9% -1.1%
1.5%
1.1%
3.1% 3.3%2.6% 2.8% 2.8%
3.8%
2.9%
MAT TY Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Estonia
Unit Value Growth Volume Growth Nominal Value Growth
71
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Non-Alcoholic Beverages show solid growth, while Hot Beverages decline in
value due to the lower coffee prices.
TOTAL ESTONIA – SUPER CATEGORIES PERFORMANCE
TOTAL ESTONIA – MANUFACTURER PERFORMANCE - FMCG
Both large and small manufacturers grow capitalising on convenience and
health trends while private labels struggle to attract consumers.
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 23.3%
Top 6-10 11.8%
Top 11-30 21.8%
Top 31-100 17.2%
100+ 18.3%
Private Label 7.7%
3.1%
3.3%
1.5%
3.6%
5.2%
2.9%
-0.7%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Chilled and Frozen products 38.8%
Alcoholic Drinks 19.0%
Shelf Stable Food 8.9%
Personal Care 7.1%
Non Alcoholic Beverages 6.8%
Confectionery 6.1%
Household products 3.9%
Snacks 3.2%
Hot Beverages 3.2%
Pet Care 2.2%
Baby Food 0.8%
3.1%
3.4%
2.6%
0.7%
1.0%
14.4%
-0.7%
2.7%
4.4%
-2.5%
3.2%
6.6%
72
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GREECE SNAPSHOT
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU). Q4 2018 GDP estimate
Vicky Grigoriadou
Managing Director
Greece
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
2.0 2.1
2.5
1.7
2.22.3
0.8 0.8
0.3
0.70.9
1.1
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
87 87 86 87 87 84
60 60 6167 68
71
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU GR
Over the past year, all key macroeconomic indexes for Greece have showed
signs of recovery with stable GDP growth and low inflation. Accordingly, Greek
consumers are increasingly optimistic across all measures of job prospects,
financial status and willingness to spend with the overall Consumer Confidence
Index climbing 10 points throughout the year, to reach 71.
In this positive environment, FMCG is up marginally this year at 2.3% (compared
to 2017) driven mainly by increased consumption. This positive momentum of
organized trade is mainly due to the restructuring of the retail network, with the
opening of the ex-Marinopoulos stores by Sklavenitis boosting the performance of
the Hypermarket format growing at 16.5% compared to previous years.
At the same time all big manufacturers display a positive trend in total, taking
advantage of the re-opening of formerly low performing stores. While Private
Label still holds a significant share in Greece (14.9%), its performance is down
(-1.6%) compared with other EU countries, given the intensive promotional
activities of branded players diminishing the price gap between branded and
private label products.
Looking ahead, 2019 is a year where further restructuring is expected in the retail
trade and mergers and acquisitions are probable. These developments will result
in a more concentrated and competitive retail landscape for Greece and it will be
important for manufacturers to ensure they adjust their strategies to a more
competitive environment and ensure the distribution strategy is focused on the
retailers and stores that really make a difference.
73
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TOTAL GREECE – CHANNEL PERFORMANCE
Restructuring within the retail landscape has boosted overall consumption,
but inflationary trends are still evident.
The opening of more Hypermarkets by Sklavenitis is producing double-digit
growth in Hypermarkets.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
2.3%
16.5%
2.1%
-0.1%
-0.4%
Total FMCG Hypermarkets Large Supermarkets Small Supermarkets Superettes
11%
38%37%
15%
-0.9%
0.5%
-1.2% -1.1% -1.4% -0.1% -0.5%
0.3% 0.5%
0.8%
3.1% 1.8%
-3.9%
3.3%
6.6%6.8%
5.4%
1.7% 1.6%
-0.2%
2.2% 2.3%
-5.1%
2.2%
5.2%
6.7%
4.9%
2.0% 2.1%
0.6%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Greece
Unit Value Growth Volume Growth Nominal Value Growth
74
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All Supergroups present positive trends, except for Alcoholic Drinks that are
marginally declining. The positive momentum of household products is both
price and volume driven and presents a switch from other channels.
TOTAL GREECE – SUPER CATEGORIES PERFORMANCE
TOTAL GREECE – MANUFACTURER PERFORMANCE - FMCG
Smaller local manufacturers show the most positive growth, whereas
Private Label is in decline as the price gap narrows compared to branded
products due to increased promotional pressure
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Dairy & Refrigerator Cat. 24.1%
Grocery 23.0%
Non Alcoholic Drinks 12.1%
Health & Beauty 11.6%
Confectionery 9.3%
Household 6.3%
Alcoholic Drinks 6.1%
Detergents 4.2%
Paper Products 3.3%
2.3%
2.5%
1.5%
3.9%
1.2%
4.3%
4.7%
-0.1%
0.9%
1.2%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 19.9%
Top 6-10 9.9%
Top 11-30 21.5%
31+ 33.8%
Private Label 14.9%
2.3%
1.7%
3.5%
0.8%
5.1%
-1.6%
75
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HUNGARY SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q4 18 OECD
Agnes Szucs-Villanyi
Market Leader, Connect, Hungary
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
87 8786
87 87
84
7674
7880
7675
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU HU
4.4
5.0 4.8 4.85.0 4.9
2.4 2.32.0
2.7
3.53.2
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
GDP growth in 2018 slightly exceeded market expectations at 5% versus
2017. Stable growth, significant wage rises, moderate inflation and a low
unemployment rate brought the Hungarian consumer confidence to 80 points
in Q2, a figure previously unseen mid-year. While confidence declined
marginally in the last two quarters, it may suggest the Hungarian economy had
reached its peak. As a consequence, experts expect slightly lower growth in
2019.
The same phenomenon may transpire in the local FMCG market as well. The
Hungarian FMCG market concluded 2018 with a strong annual performance at
7.2%. This figure resulted from the mean of the first three quarters with 7+%
growth rate and the last quarter with a noticeable slowdown (5.5%).
Consumers’ change in attitudes towards spending is most evident in altered
perceptions to prices. In Q4 2018, slightly more consumers felt that it was a
good time to purchase (27%, +2%). But their major concerns surround
increasing food prices with grew sharply from 14% to 22% year over year.
Nonetheless, this is still a great time for consumers to shop, and this
environment provides manufacturers and retailers with the opportunity for
thinking big. The above-mentioned changes may highlight the importance for
thinking ahead to the future needs of consumers as exceptional growth rates
are difficult to sustain. Thus, consumers growing demand for premium
products and constant need for low prices and promotions need to be
satisfied in an effective and creative manner as well.
76
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TOTAL HUNGARY – CHANNEL PERFORMANCE
Despite the slowdown in Q4, the Hungarian FMCG full year growth
exceeded the already impressive growth of the last two years.
Due to constant and strong double-digit growth, Discounters became the most
important channel in the market, outperforming Hypermarkets not only through
sharp price points but also expanded ranges and shopper experience.
FMCG MARKET DYNAMICS OFFLINE
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
7.2%
3.1%
3.2%
17.6%
2.1%
10.8%
6.8%
Total FMCG Hypermarkets Large Organized Discounters
Small Organized Drug Stores Independent Stores
25%
14%
25%
17%
8%
12%
4.3%4.3%
2.0%2.8%
5.0%4.5%
3.8% 4.2% 4.2%4.5%
1.6%2.9%
1.5%
3.7%
0.3% 3.7%4.5%
3.6%3.4%
1.0%5.9%
7.2%
3.5%
6.5%
5.3%
8.2% 8.3%7.8% 7.6%
5.5%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Hungary
Unit Value Growth Volume Growth Nominal Value Growth
77
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Growth of Top 11-30 upper mid-sized company range jumped far ahead of
the others riding, first and foremost, the growth of the alcohol category
TOTAL HUNGARY – SUPER CATEGORIES PERFORMANCE
Convenient, healthy and indulgent categories, segments and products are
ahead of the average growth.
Total FMCG includes Private label but Private label is not included in manufacturer tiers
TOTAL HUNGARY – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 20.4%
Top 6-10 11.7%
Top 11-30 21.8%
Top 31-100 22.2%
100+ 23.8%
7.2%
7.6%
7.1%
8.3%
5.1%
4.7%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Dairy Products 15.0%
Processed Meat 12.8%
Non Alcoholic Beverages 11.9%
Alcoholic Beverages 9.9%
Personal Care 9.1%
Dry Grocery 8.0%
Cleaning / Household 6.3%
Confectionery 5.5%
Hot Beverages 3.6%
Snacks 3.2%
Frozen Foods 3.0%
Household Paper 3.0%
Petfood 2.9%
Biscuits/Wafers 2.7%
Breakfast 2.0%
Baby Care 1.3%
7.2%
4.2%
5.8%
12.3%
9.9%
7.7%
2.1%
9.5%
6.7%
4.7%
11.8%
11.9%
6.4%
8.2%
4.2%
7.1%
7.8%
78
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KAZAKHSTAN SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Local statistical office
Ilona Lepp
Managing Director
Baltics
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
4.2
3.1
4.1 4.3 4.1 4.1
7.07.4
6.66.2 6.0
5.3
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
87 87
8687 87
84
83
81
79
84
79
83
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU KZ
Kazakhstan continued its positive economic growth through Q4 with a 4.1% growth in the
GDP versus the same quarter in 2017. This positive trend contributes to the growth of
consumer confidence that reached 83 points. Price increases over the last three months
of the year were down 1.8% against 2.9% for the 4th quarter of 2017 and 2.7% in 2016.
The FMCG market showed an increase in Q4 year-on-year by 4.7% growth in value and
-1.7% in volume. The greatest contribution to the positive growth of the FMCG market
comes from large channel (with 35% growth contribution) due to deep promotions and
medium channels (20%) due to changing service type from counter to self-service.
Changing consumer preferences in channels as well as heating promotional pressure,
continues to impact Drug stores (-11.4%) and Small stores (-3.1%).
Alcohol categories displayed some negative performance for the year, while the smaller
value contributors such as Pet food, Baby food, Baby Care and Dairy are thriving by deep
promotions in large channels stores. Tobacco and Beverages - two super categories
taking almost half of the market - have managed to maintain significant growth 5% and
4%, respectively. Tobacco growth in value driven by increasing of minimum retail selling
price (regulated by government) and Beer as consumers switched from spirits to beer
(lower price point and increased alcohol content in beer). The main growth in the market
is coming from the top 10 that are performing well as operations scale and small
producers, many local players, who have captured niche segments. Stable prices in the oil
market have had a positive effect on the growing economy. Slower inflation offers
opportunities to alleviate consumer concerns over prices, while increasing disposable
income of consumers in Kazakhstan (7.9% in the last year) is encourage spending.
The demographic profile of Kazakhstan also plays a pivotal role in understanding shopper
needs as the average age of Kazakhstan residents is 30 years old. With a strong skew to
a younger generation, it is important that manufacturers focus on this group’s preferences
towards convenience and quality service. These consumers prefer multi-functional stores,
speed and comfort and buy goods on-the-go. For retailers, now is the right time to offer
quality products with targeted promotions.
79
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4.1%
14.7%
2.9%
-3.1%
-11.4%
3.6%
Total Kazakhstan Urban Large Stores Medium Stores Small Stores Drug Stores Other*
TOTAL KAZAKHSTAN URBAN – CHANNEL PERFORMANCE
The FMCG market shows an increase in Q4 versus the same quarter a year
ago by 4.7% in value and -1.7% in volume, due to price increases of 6.3%.
The greatest contribution to the positive growth of the FMCG market comes from
large channel (35% of growth contribution) due to deep promotions and medium
channels (20%) due to changing service type from counter to self-service.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
* Other includes: Kiosk s/Pavilions, Open markets, Petrol Stations, Tobacconist
35%
20%
34%
3%
8%
8.1%
6.2%
10.6%
7.5%
5.8% 6.0% 5.5%5.2%
6.6%
6.3%
-1.7%-2.2% -2.4% -2.3%
0.0% 0.3% 0.4%
-3.2% -3.6% -1.7%
6.4%
4.1%
8.2%
5.2%5.9% 6.4% 5.9%
2.0%3.0%
4.7%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Kazakhstan Urban
Unit Value Growth Volume Growth Nominal Value Growth
80
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Smaller value contributors such as Pet food, Baby food, Baby Care and Dairy
are thriving by deep promotions in large channels stores.
TOTAL KAZAKHSTAN URBAN – SUPER CATEGORIES PERFORMANCE
TOTAL KAZAKHSTAN URBAN – MANUFACTURER PERFORMANCE - FMCG
The main growth in the market is due to the top 10 - due to scale effect with
better distribution and retailer relationships helping assortment and promotion.
Small producers grow due to owning niche market, including local producers.
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total Kazakhstan Urban 100.0%
Top 1-5 39.9%
Top 6-10 14.7%
Top 11-30 4.1%
Top 31-100 0.4%
100+ 41.0%
4.1%
2.3%
7.7%
1.1%
6.1%
4.8%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total Kazakhstan Urban 100.0%
Beverages 25.4%
Tobacco 21.7%
Dairy 14.3%
Personal Care 10.2%
Food 9.7%
Confectionery 8.1%
Alcohol 6.1%
Home Care 2.6%
Baby Food 1.3%
Pet Food 0.4%
Baby Care 0.1%
4.1%
3.9%
5.0%
9.8%
1.8%
3.0%
6.6%
-10.1%
6.7%
9.5%
24.2%
13.9%
81
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LATVIA SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Ilona Lepp
Managing Director
Baltics
Source: OECD/local government The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
5.8
4.85.2
4.2
4.8 5.0
2.92.6
2.02.4
2.9 2.9
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
87 87 86 87 87 8478
73
8680 82 83
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU LV
The Latvian economy completed the year in a strong position with GDP growth
at 5% for Q4 although positive growth was likely due to some traction in Q4,
due to softer export demand amid elevated global trade tensions, a passive EU
business environment and the lack of clarity with Brexit. The overall expansion
was underpinned by strong growth dynamics, as tighter labour market
conditions stimulated private consumption. Consumer confidence remains
stable over the past few quarters, however consumers rarely put savings aside
for a rainy day. In an environment of labour shortages, incomes are
increasingly supporting consumer spending.
In FMCG, Q4 saw the market grow by 5.9%, driven more by price increases
(3.3%) rather than volume (2.6%). Convenience/Petrol Stations (24.2%) and
Pharmacies (15%) witnessed the strongest growth for the year but smaller
outlets were also strong, with focus on proximity and convenience such as with
Superettes and Groceries (7.7%). From a category perspective, Beverage
performance was strongest in both Non Alcoholic (14.5%) and Alcoholic Drinks
(10.5%), with the former traditionally growing due to the Winter holidays. Pet
Care (8.9%), Snacks (8.2%) and Baby Food (7.0%) continued their positive
trend, partly due to shelf price increases.
As Latvian retailers have upgraded their branding concept over the past few
years, we have seen increased demand for convenience, fast self-service and
healthy solutions. Latvian consumers continue to seek out “local” and “healthy”
options, so it is critical for both retailers and manufacturers to ensure they
address these emerging needs offering value-for-money by determining the
optimal shelf and promotional pricing across channels.
82
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TOTAL LATVIA – CHANNEL PERFORMANCE
The FMCG market continued its recovery across the year with positive sales
volume growth for the fourth consecutive quarter, as the improving economy
led to increased demand.
Convenience/Petrol Stations enjoyed solid growth due to strong performance
of Impulse categories such as Beverages, Snacks and Chocolate count
lines.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
* Backdata not available due to Universe Update
2.8%
4.3%3.4%
1.6%2.2%
3.2% 3.3%
2.8%
-0.2%
0.4%
2.0%
2.7%
4.5%2.6%
5.5%
4.0% 3.8% 3.5%
4.9%
7.6%
5.9%
MAT TY Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
LatviaUnit Value Growth Volume Growth Nominal Value Growth
5.5%
4.8%
3.7%
7.7%
24.2%
15.0%
Total FMCG Hypermarket/Large Supermarkets+Drugstores
Small Supermarkets/Discounters Superettes/Groceries
Conveniences/Petrol Stations Pharmacies
41%
35%
20%
3%
1%
83
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Winter and Christmas seasonality was behind strong performance of
Beverages this quarter.
TOTAL LATVIA – SUPER CATEGORIES PERFORMANCE
TOTAL LATVIA – MANUFACTURER PERFORMANCE - FMCG
Growth is not polarised by large or small players rather by manufacturers
with balanced product portfolios across price tiers and segments that meet
consumer demands with competitive price points as well.
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 18.2%
Top 6-10 9.6%
Top 11-30 19.1%
Top 31-100 21.8%
100+ 22.0%
Private Label 9.4%
5.5%
3.8%
10.8%
5.1%
8.9%
4.1%
0.8%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Chilled and Frozen products 32.9%
Alcoholic Drinks 20.2%
Shelf Stable Food 11.1%
Personal Care 7.7%
Non Alcoholic Beverages 7.6%
Confectionery 6.1%
Household products 4.0%
Hot Beverages 3.9%
Snacks 3.4%
Pet Care 2.2%
Baby Food 0.9%
5.5%
5.3%
10.5%
-1.7%
4.3%
14.5%
1.3%
2.3%
-2.2%
8.2%
8.9%
7.0%
84
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LITHUANIA SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Ilona Lepp
Managing Director
Baltics
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
Source: OECD
3.63.8
3.53.7
2.2
3.6
4.4 4.2
3.4
2.62.3 2.5
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
87 8786
87 87
84
7779
7778
8382
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU LT
After a disappointing third quarter impacted by lower crop yield and weak external
demand, the Lithuanian economy displayed signs of recovery by the end of 2018
with 3.2% growth. Fuelled by recovering internal consumption and positive
performances in the manufacturing, construction, wholesale and retail trade
sectors, the country’s GDP remains stable but at a lower level compared to the
first two quarters of the year. Inflation continued to decline to a low of 2.5% for Q4
2018 affecting households’ disposable income. Consumer confidence trended
upwards in the last two quarters becoming more optimistic across all measures of
future job prospects, personal finances and it being a good time to buy. Health
remains a key issue for Lithuanians, and while easing inflation has eased
consumers’ concerns around increasing food prices, escalating utility costs are
top of mind.
An unusually hot summer boosted FMCG volume growth in Q2 and Q3 of 2018;
and in Q4, the FMCG market recorded a positive overall value growth of 2.4%,
however this was largely driven by price influences. Seasonal categories, which
had outstanding performance within Q3 strongly influenced the annual FMCG
performance. Chilled and Frozen products (6.5%), Non Alcoholic Beverages
(14.8%), Snacks (6.9%) continued to enjoy solid performances throughout 2018.
Meanwhile, Hot Beverages and Shelf Stable Foods had some negative
performance of -2.3% and -1.1% respectively, indicating signals of shifting
consumer habits and declining consumption. Private Labels have not kept pace
with consumers’ growing preference for innovative and convenience products that
have been the focus of medium and smaller manufacturer’s brands.
With continued uncertainties and EU slowdown, the Lithuanian economy becomes
more dependent on internal consumption. Although inflationary pressure is
slowing, consumer preference for products with a strong value positioning is
strong. It is highly important for retailers and manufacturers to take into
consideration price sensitivity, to ensure promotional offers are targeted at the
most responsive products and innovation focuses on growing convenience and
health trends.
85
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TOTAL LITHUANIA – CHANNEL PERFORMANCE
After outstanding FMCG market performance in Q3, consumption
declined with the only growth coming from inflationary pressures.
New openings of Large supermarkets support consumers’ increasing desire for
more convenient locations with a good assortment. Convenience/Petrol stations
growth follows consumers’ ongoing need for convenience offerings.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
* Backdata not available due to Universe Update
22%
25%37%
10%
1%3%
2%
3.0%
7.3%
7.5%
4.7%
1.9%2.6%
2.0%
0.3%
-2.6%-2.6% -2.1%
1.2%
2.6%0.4%
3.4%
4.7% 4.9%
2.6%3.1%
5.2%
2.4%
MAT TY Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Lithuania
Unit Value Growth Volume Growth Nominal Value Growth
3.4%
2.1%
8.2%
0.4%
2.7%
25.0%
2.1%
10.9%
Total FMCG Hypermarkets Large Supermarkets
Small Supermarkets/Discounters Superettes/Groceries Conveniences/Petrol Stations
Drug Stores Pharmacies
86
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Declining performance of Hot Beverages and Shelf Stable Foods indicate signals
of changing consumer habits and declining consumption of basic categories.
TOTAL LITHUANIA – SUPER CATEGORIES PERFORMANCE
TOTAL LITHUANIA – MANUFACTURER PERFORMANCE - FMCG
Medium and Small players are focusing on health and convenience trends. Private
Label has not kept pace with these trends and suffered accordingly.
MAT Q4-2018 MAT Q4-2018
.
MAT Q4-2018 MAT Q4-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 18.1%
Top 6-10 9.2%
Top 11-30 21.6%
Top 31-100 22.7%
100+ 19.6%
Private Label 8.9%
3.4%
3.3%
4.7%
4.8%
4.6%
3.2%
-3.5%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Chilled and Frozen products 29.3%
Alcoholic Drinks 23.4%
Shelf Stable Food 10.4%
Personal Care 10.1%
Non Alcoholic Beverages 7.2%
Confectionery 5.6%
Household products 4.3%
Hot Beverages 4.1%
Snacks 3.2%
Pet Care 1.9%
Baby Food 0.7%
3.4%
6.5%
-1.2%
-1.1%
3.5%
14.8%
-0.2%
6.6%
-2.3%
6.9%
10.6%
7.0%
87
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POLAND SNAPSHOT
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q4 18 OECD
Karolina Zajdel-
Pawlak
Managing Director,
Poland
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
87 87 86 87 87 84
104 104 103 105 103 105
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU PL
5.5
4.65.0 5.2
5.7
4.6
2.02.3
1.51.8
2.1
1.4
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
2018 turned out to be a very strong year for Polish economy with 5.1% annual GDP
growth, despite some moderation in the last quarter at 4.6%. Favourable
macroeconomic conditions combined with the governments’ initiated social transfers,
translated into households with increasing disposable incomes and high levels of
optimism. Consumer confidence in Poland reached an index of 105 in Q4 2018,
significantly above the EU average of 84. Poles remain positive about their job
prospects in the coming year which is a reflection of continued low unemployment levels
(below 6% on an annual basis) as well as the optimism surrounding their personal
finances in the next 12 months. In light of record-low inflation level (1.6% for 2018) the
concern around increasing food prices is also declining.
FMCG nominal value growth rate in 2018 reached 4.8%, slightly lower in Q4 (4.3%)
than in Q3 (5.8%) as a result of the exceptional summer-season boost to many
categories. Increasing prices (2.2%) which is above the inflation rate of 1.6%,
contributed towards FMCG growth for the year reflecting the rising importance of more
premium offerings across multiple categories. The volume growth rate accounted
respectively for the 2.6%. In 2018 there were two contradictory events that impacted
FMCG performance: an exceptional summer period boosted sales while the
implementation of a Sunday trade ban regulation limited the number of Sundays in a
month that shops could trade on. In light of this, we can see hypermarkets and
supermarkets did not capitalise on the favourable summer conditions and seem to be
more impacted by Sunday trade limitations. In contrast small format stores and
discounters have prospered in this environment.
While it appears that unusually favourable summer conditions have negated the
expected negative impact of Sunday trade ban in 2018, further restrictions to Sunday
trading in 2019 may have a more significant impact. However there are still
opportunities for growth in the Polish retail landscape as Poles are optimistic about their
personal finances and eager to trade up to more premium offerings that meet their
evolving needs and conscious shopping choices. Healthy, environmentally friendly
options as well as products meeting shopper need for convenience have been on the
rise in 2018 and are expected to continue their momentum.
88
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TOTAL POLAND – CHANNEL PERFORMANCE
FMCG sales value grew by 4.3% in Q4 18 in comparison to the same
period last year. Price change was the main driver of this growth.
Discounters growth has come from new store openings while Small
Format has benefited from the Sunday ban.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
4.8%
-1.1%
-0.3%
7.4%
5.8%
6.3%
Total FMCG Hypermarkets Supermarkets Discounters Drugstores Small Format
10%
14%
32%7%
36%
2.7% 2.2%2.0%
2.0%3.0%
2.1%0.9%
1.7% 2.0% 2.7%
1.6% 2.6%
-1.2%
3.6%1.6%
3.8%5.0%
1.8%
3.9%1.6%
4.3%4.8%
0.7%
5.6%
4.6%
5.9% 5.9%
3.4%
5.9%
4.3%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Poland
Unit Value Growth Volume Growth Nominal Value Growth
89
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SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Alcoholic Beverages 23.4%
Culinary 16.3%
Non-Alcoholic Beverages 14.5%
Dairy 13.7%
Confectionery 11.5%
Cosmetics Categories 8.5%
Paper Sanitary Hygiene & Other 4.6%
Home Categories 4.4%
Frozen Products 3.3%
4.8%
5.0%
2.4%
7.2%
4.3%
4.7%
4.3%
3.0%
4.9%
13.3%
The wider assortment of Branded products available in Discounters is
behind the faster growth of Top Manufacturers compared to Private Label.
Convenience offering underscored the performance of Beverages and
Frozen food.
TOTAL POLAND – SUPER CATEGORIES PERFORMANCE
TOTAL POLAND – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 16.1%
Top 6-10 10.9%
Top 11-30 19.9%
Top 31-100 16.9%
100+ 17.1%
Private Label 19.1%
4.8%
6.3%
5.6%
4.4%
5.6%
4.9%
3.0%
90
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ROMANIA SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q4 2018
Iulia Pencea
Managing Director
Romania
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
87 8786 87 87
84
98
9091 92
98
101
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU RO
8.8
6.7
4.0 4.1 4.3 4.1
1.5
3.1
4.75.3
5.0
3.6
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
The Romanian economy continued positively, with GDP growth to be 4.1% for
Q4 2018 versus year ago and inflation slowing to 3.6%. After several waves of
salary increases and looking ahead to when Romania holds the presidency for
the Council of Europe, consumers are feeling more confident in the economy
and their own finances. This opinion is reflected also by the consumer
confidence index which peaked at 101 in Q4.
FMCG performance was strong across 2018 driven finishing Q4 with 8.6%
nominal growth based on a 4.9% volume increase and an average of 3.7%
prices growth. Hypermarkets remain the slowest growing channel, with a 2.2%
value increase brought only by inflation, while the trend towards convenience
drives consistent growth in the proximity formats. Supermarkets continue to grow
in double digits, supported by their numeric expansion, while Traditional Trade’s
positive evolution continues, supported by salary increases and convenience.
Beverages, followed closely by Household and Personal Care products also had
double digit growth, while Frozen Food development is surpassing Fresh Food
development in Q4, 2018.
Despite higher prices, Romanians’ optimism is still translating into increased
consumption and this will be supported further through the social-oriented
measures expected during an electoral year (elections for EU Parliament in May
and presidential elections in Nov 2019). However, the corporate world is
concerned with the latest governmental decisions impacting private sector’s
budgets, so growth plans for 2019 must be backed-up by flexible scenarios to
accommodate possible economic trend changes.
91
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TOTAL ROMANIA – CHANNEL PERFORMANCE
Consumption continues to be the economic growth trigger, driven by
higher wages and low unemployment rates.
With Hypermarkets growth is slowing, market growth is driven by the
convenience / proximity channels (Supermarkets and Traditional Trade).
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
8.8%
2.2%
16.1%
10.3%
9.9%
11.7%
10.8%
Total FMCG Hypermarkets Super/Minimarkets
Discounters Traditional Trade Pharma/Cosmetics
Petrol Stations/Convenience
27%
19%
11%
41%
1%1%
3.8%5.3%
1.2%1.7%
4.6%5.6% 5.3%
3.1% 3.4% 3.7%
3.6%
3.5%
5.4% 4.9%
2.3%
3.7%
3.3%6.7%
4.7% 4.9%
7.4%
8.8%
6.6% 6.6% 6.9%
9.3%8.6%
9.8%
8.1%8.6%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
RomaniaUnit Value Growth Volume Growth Nominal Value Growth
92
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Overall increase is visible across most categories. Main food categories
remain behind beverages, household and personal care products that
continue their growth in double digits.
TOTAL ROMANIA – SUPER CATEGORIES PERFORMANCE
TOTAL ROMANIA – MANUFACTURER PERFORMANCE - FMCG
Top 5 FMCG manufacturers are predominantly operating in beverages
have driven growth via new product lines, premium packaging and
year-end promotions
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Dry Grocery 29.0%
Fresh Food 22.4%
Beverages - Alcoholic 14.5%
Beverages - Non Alcoholic 13.8%
Personal Hygiene/Cosmetics 8.6%
Household Care 7.8%
Frozen Food 3.0%
Non Food 0.8%
8.8%
6.8%
7.4%
10.4%
13.3%
10.0%
11.2%
8.4%
-6.3%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 17.0%
Top 6-10 9.3%
Top 11-30 19.1%
Top 31-100 20.9%
100+ 21.2%
Private Label 12.4%
8.8%
13.5%
5.7%
9.3%
9.7%
6.8%
6.3%
93
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RUSSIA SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q4 18 Rosstat
Alexander Kotsuba,
Managing Director
Nielsen Russia
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
87 87 86 87 87 84
70 69 68 70 67 65
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU RU
2.1
1.01.3
1.8 1.92.2
3.3
2.52.4 2.4
2.9
3.9
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
2018 turned out to be the fifth year in a row where Russian consumers’ real income -
one of the key economic indicators of consumer spending power - was in decline: -0.2%
vs 2017 (Rosstat). Experts agree that real income is not likely to return to positive
direction in 2019 either as: growing tax burden, decreasing share of income from
entrepreneurial activity and stagnation of social transfers put pressure on consumers’
disposable funds. At the same time, retail turnover in 2018 grew 2.6% (Rosstat) - most
likely due to increased volume of credits borrowed: its amount in 2018 went up 23% - as
opposed to 13% a year ago. Amount of loans taken for retail spending purposes is
among the highest in Eastern Europe and stands for almost 10% of Russian GDP.
Consumer Confidence in Russia closed the year (Q4) at its two-year lowest score (65
points with the historically low 63 points being posted in Q1 and Q4 2016). Rising prices
for food is a concern for 35% of consumers versus 23% in Q3 - this notable increase
comes as no surprise, as inflation totalled 4.3% in 2018 with significant acceleration at
the end of the year.
Transformation in FMCG retail has gained momentum with a great deal of recent
activity. Metro announced online sales availability for all of its shoppers, Ozon.ru
launched subscription for delivery, largest food tech company, Delivery club, announced
its revenue growth of almost 50% in 2018 and its customer base increase of 67% in Q4
2018. Yandex. Market, a joint venture between Sberbank and Yandex, announced its
new marketplace for international FMCG products delivery, on top of the existing
marketplace “Beru” for Russian FMCG produce. Retailers continue to re-think their
business models, with the largest retailer, X5, investing in postamat business (in-store
pick up service for online orders) and specialty retailer Vkusvill entering the vending
market and launching self-service stores in office locations.
For FMCG manufacturers, these shifts mean they need to be faster, smarter and more
granular in their sales efforts. The increased number of sales channels, rising power of
online in FMCG and emerging competition from niche products delivered internationally
is changing the retail landscape and fast-casual meal delivery companies are
encroaching on traditional FMCG space. Recent news in the retail market is that
retailers Krasnoe & Beloe, Bristol (two largest alcohol specialists with wide FMCG
assortment) and Dixy (fifth food retailer) announced their merge into one business,
becoming the third largest player in the market. This will lead to further strengthening of
retailers’ negotiating positions.
94
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TOTAL RUSSIA – CHANNEL PERFORMANCE
Weak December sales (0.5% growth in volume terms vs year ago compared
to 5.1% in 2017) contributed to the slow-down of sales in volume in Q4 2018.
Growth in Traditional Trade channel is attributed to the proliferation of
specialist stores that are part of "traditional" segment in Russia.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
5.9%
7.3%
1.9%
Total FMCG Modern Trade Traditional Trade
75%
25%
3.2%
2.8%
6.0%3.5%
1.9% 1.3% 1.5%2.2%
3.5% 3.8%
-0.1%
3.1%
-3.3%
-0.3%
0.2%
2.8% 2.3%
4.6%3.1% 2.4%
3.1%
5.9%
2.7%3.3%
2.1%
4.1% 3.8%
6.7% 6.6% 6.2%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Russia
Unit Value Growth Volume Growth Nominal Value Growth
95
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Private Label decline was driven by supermarkets channel that accounts for
50% of PL value sales and where its share declined by almost 1%.
Beer’s strong growth in contrast to preceding years of decline were supported by
FIFA World Cup, hot and long summer period and by low 2017 base
TOTAL RUSSIA – SUPER CATEGORIES PERFORMANCE
TOTAL RUSSIA – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Tobacco 15.0%
Other Food 14.8%
Dairy 12.5%
Non-Alcoholic Beverages 11.9%
Beer 8.6%
Personal Care & Make-Up 7.0%
Vodka 6.6%
Sauces & Grocery 5.9%
Other Alcohol 4.8%
Home Care 3.1%
Pet 2.9%
Baby Food & Infant Formula 2.2%
Ice Cream 2.0%
Frozen Food & Fish 1.6%
Baby Care 1.2%
5.9%
12.3%
5.1%
2.4%
8.1%
7.9%
3.1%
-2.7%
0.7%
9.8%
2.1%
13.9%
4.2%
16.7%
6.7%
-2.9%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 20.2%
Top 6-10 11.8%
Top 11-30 17.7%
Top 31-100 16.9%
100+ 29.6%
Private Label 3.8%
5.9%
9.2%
3.6%
6.0%
5.9%
5.9%
-4.4%
96
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SERBIA SNAPSHOT
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Local government source Q4 2018 estimates
Miroslav Tasic
Group Managing
Director Adriatic
Region
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
2.3 2.4
4.9 4.8
3.73.5
3.0 2.9
1.6 1.7
2.42.0
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
87 87 86 87 87 84
69 6974 75 74
78
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU RS
Serbia’s economy recorded a GDP growth of 3.5% year-on-year in Q4, which is
slightly slower than Q2 and Q3, but stimulated by higher public investment and
consumption. Inflation in Q4 was lower than expected (2%) due to significant
decreases in world oil prices. Consumer confidence continued its upward trend
and in Q4 reached 78 points, closing the gap with the European average. Greater
consumer optimism stimulated higher consumption and less price sensitivity. Still,
job prospects remains the biggest concern with as many as 71% of Serbians
saying they only have enough money to cover basic expenses.
The FMCG industry is also showing some healthier volume growth; but price
remains the strongest driver. In Q4, many Serbians were celebrating their “Slava”
and New Year so one of the biggest value increases came from Alcoholic
Beverages and Frozen assortment, bought mostly in Q4. Lidl announced their
business results which were higher than expected and voiced intentions that they
will be opening more stores in the near future. This is expected to have more
impact on the growth of hyper/supermarkets channel.
On the channel side, we see smaller format stores getting stronger with more
shoppers switching from monthly to weekly or bi-weekly store visits. Proximity of
stores and convenience remain the main shopping drivers, something that is
heavily influencing the growth of smaller format stores. Large and Medium
groceries are recording significant growth in Q4 as well, due to their more
accessible format.
Following news of Coca Cola acquisition of one of the biggest local
manufacturers, there is industry discussion about the separate but further
acquisition of two other big local manufacturers in Serbia. This will impact FMCG
market concentration, so manufacturers should closely monitor happenings on the
market. Serbia FMCG industry is expected to continue its growth, and alongside
the increase in pensions and minimum wages, it is a chance for both
manufacturers and retailers to grow by focusing on straightening their business
and closely following the needs of these consumers who will have more money in
their pockets.
97
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TOTAL SERBIA – CHANNEL PERFORMANCE
Increase in prices is driving FMCG growth
Significant growth of smaller format stores is, due to changing shopping
trends and a preference towards convenience.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
4.2%
0.5%
8.2%
5.4%
-0.4%
8.6%
9.6%
11.7%
Total FMCG Hyper/Super Large/Medium Groceries Small Groceries
Kiosks/ Pavillions Drug Stores Petrol Stations Pharmacies
28%
29%
22%
13%
4%3%
0%
*Serbia data has 3 (4 monthly periods) in a year, (Jan-Apr, May-Aug & Sept-Dec)
2.9%
3.3% 3.7%
3.6%
3.4%3.9%
3.3%
2.9%
3.6%
3.3%
-0.5%
0.9% 0.6%
-1.2% -2.0% -2.0% -0.5%
0.7%
1.3%
0.8%
2.4%
4.2% 4.2%
2.4%
1.3%
1.9%
2.9%
3.6%
4.9%
4.0%
MAT YA MAT TY Q2 16 Q3 16 Q1 17 Q2 17 Q3 17 Q1 18 Q2 18 Q3 18
Serbia
Unit Value Growth Volume Growth Nominal Value Growth
98
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Beverages and frozen assortment grew significantly, primarily due to
the holiday season in Serbia.
TOTAL SERBIA – SUPER CATEGORIES PERFORMANCE
TOTAL SERBIA – MANUFACTURER PERFORMANCE - FMCG
A new government policy encouraging the growth of start-ups and small
businesses has resulted in improved performance among smaller players.
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018
MAT Q4-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Tobacco 29.8%
Food Fresh Refrig. 14.6%
Beverages Non-Alcoholic 13.7%
Confectionery And Snacks 11.8%
Beverages Alcoholic 8.5%
Personal Care 7.1%
Food Shelf Stable 6.5%
Household Products 5.0%
Frozen 2.8%
Pet Food 0.3%
4.2%
3.7%
3.3%
5.0%
4.8%
10.0%
3.1%
-0.6%
1.7%
10.7%
8.8%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 33.7%
Top 6-10 10.8%
Top 11-30 21.9%
Top 31-100 17.3%
100+ 12.3%
Private Label 4.0%
4.2%
2.9%
5.9%
2.9%
6.9%
6.5%
0.5%
99
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ECONOMY WATCH
SLOVAKIA SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX
Source Economist Intelligence Unit (EIU) OECD
Karel Tyra Managing Director,
Slovakia
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
87 87
8687 87
84
87
86
90
93
90
92
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU SK
3.3
3.73.9
4.34.5
4.0
1.62.0
2.4
2.8 2.7
2.2
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
The Slovak economy continues to be in good shape and 2018 was not an
exception with GDP continuing its growth trajectory for nine consecutive years.
These positive conditions are supporting the labour market with unemployment
levels at a historic low of 5% (vs 14% in 2010). Slovak consumers continued to
be increasingly optimistic throughout 2018, with the index ending Q4 at a high of
92 points. Declining unemployment improved confidence about future job
prospects and pushed concern about job security out of top three. Similarly to
Czechs, Slovaks are most concerned about their own health, which presents
great opportunities for manufacturers and retailers to drive innovations in this
area in new categories, segments, improved ingredients and in their
communication to consumers.
In Q4 consumers’ concern regarding increasing utility bills doubled compared to
the previous quarter as inflationary pressures pushed up prices. As a result,
more Slovaks are searching for opportunities to save on gas and electricity.
Despite the optimistic economic environment, FMCG growth has slowed due to
declines in volume consumption. Growth was buoyed by price increases which
we anticipate will continue if inflationary levels continue throughout 2019.
Looking ahead, there is much speculation about the new taxes that could be
implemented on the retail sector against large, (mostly foreign) retailers. Behind
the legislation is also the notion that retailers should be giving more support to
local brands and that the money raised should be used to support local food
production. This type of disruptive legislation could have a huge impact on the
retail landscape for retailers and manufacturers alike, but it also points to a
growing sentiment to support local which we see across many markets.
100
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TOTAL SLOVAKIA – CHANNEL PERFORMANCE
Inflationary pressures and the growth of premium segments is driving FMCG
performance.
Drug chains are performing very strongly as consumers seek convenience from
smaller stores with varied assortment.
FMCG MARKET DYNAMICS*
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
1.1%
0.4%
1.3%
-2.2%
10.4%
Total FMCG Hyper/SupermarketsHyper/Supermarkets (incl. Lidl)
Organized Groceries Non Organized Groceries
SK Organized Drug
60%
27%
6%7%
3.1%
2.7%
2.2% 3.1%
4.7%
3.3%
2.9%3.5%
1.7%
2.8%3.3%
-1.5%
2.0%6.3%
-0.5%
4.3%
-1.7%
-4.0%
0.5%
-1.2%
6.4%
1.1%
4.3%
9.4%
4.2%
7.5%
1.2%
-0.5%
2.2%1.6%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Slovakia
Unit Value Growth Volume Growth Nominal Value Growth
101
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For the first time in several years Private Label is declining due to heavy
promotional pressure of major brands and consumer preference for
branded products.
All drug product groups and seasonal food categories drive nominal growth
in 2018.
TOTAL SLOVAKIA – SUPER CATEGORIES PERFORMANCE
TOTAL SLOVAKIA – MANUFACTURER PERFORMANCE - FMCG
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 13.7%
Top 6-10 9.0%
Top 11-30 17.0%
Top 31-100 19.3%
100+ 19.3%
Private Label 21.6%
1.1%
2.3%
3.0%
2.0%
1.9%
0.2%
-0.8%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Dairy 18.2%
Sweets & Treats 17.0%
Beverages Alcohol 16.8%
Health & Beauty 11.3%
Culinary - Shelf Stable 9.6%
Beverages Non Alco 9.2%
Beverages Hot 4.6%
Home Care excl. Laundry 2.5%
Home Care - Laundry 2.3%
Baking - Shelf Stable 1.9%
Infant Care 1.8%
Culinary - Frozen 1.7%
Pet Care 1.5%
Frozen – Ice Cream 1.5%
1.1%
-0.2%
0.1%
3.0%
3.3%
-0.6%
3.2%
-1.4%
3.0%
2.9%
-12.1%
0.5%
-0.1%
4.7%
14.1%
102
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SLOVENIA SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Local government The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
Miroslav Tasic
Group Managing
Director Adriatic
Region
5.1
6.2
5.0
3.8
4.8
4.1
1.2 1.3 1.3
1.9 1.9 1.9
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
87 87
86
87 87
848483
81
87 8787
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU SI
Slovenian GDP continued its strong growth in Q4 reaching 4.1% over the same
period versus previous year and according to first estimates saw full year 2018
GDP at 4.5% growth. The positive economic conditions were complemented by
the lowest unemployment rate in the last ten years leading to a mild increase in
the cost of living essentials at 1.5%
Despite the overall positivity, consumer sentiment (measured by the Consumer
Confidence Index) remained unchanged at 87 points in Q4 2018 which was just
above the European average. The favourable economic environment means
households have more disposable income, some of which is being put into
savings, but also increasingly into holidays and home improvements. Value
growth continues to drive FMCG growth with an increase by 2% in Q4.
Benefitting from the warmer Q3, annual performance of Salted snacks grew the
most in comparison to the same period last year 5.9%. They were followed by
Meat and meat products 5.7%, whereas Baby Food performance (3.9%) was
driven by increased prices.
Among the channels, Discounters recorded the highest growth in Q4. Private
label growth was mainly led by their lower cost as well as new product lines
following current trends like Bio, Eco and Organic, as well as less intensive
promotions in traditional retail chains.
Increasing utility bills and work-life balance are very highly ranked concerns but
health is still the number one concern for Slovenian consumers (and
significantly above the European average). This concern for health is an
opportunity within the Slovenian marketplace for companies with relevant
products and communication as 29% of Slovenian consumers willing to pay a
premium for organic or all natural products.
103
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TOTAL SLOVENIA – CHANNEL PERFORMANCE
FMCG growth was influenced by rising prices, due to less promotional
activity.
Discounter sales are led by sales of their private labels which are featured
heavily in promotional activity.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
1.8%
2.5%
0.8%
0.6%2.2% 2.6% 2.5%
2.7%
2.2%2.0%
0.8%
-0.5%
-1.2%
2.0%
0.0%
3.2%
1.5%
-1.4%
0.5%
-1.6%
2.6%2.0%
-0.4%
2.6%2.1%
5.8%
4.0%
1.3%
2.7%
0.4%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
SloveniaUnit Value Growth Volume Growth Nominal Value Growth
2.0%
-1.6%
1.0%
-1.8%
1.0%
-1.5%
7.5%
2.5%
Total FMCG Hypermarkets Supermarkets Large groceries Medium and Small groceries Kiosks Discounters Drugstores
15%
41%10%
3%
0%
27%
4%
104
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Salted Snacks and Beverages kept their growth momentum influenced
by soccer World Cup and prolonged warm weather.
TOTAL SLOVENIA – SUPER CATEGORIES PERFORMANCE
TOTAL SLOVENIA – MANUFACTURER PERFORMANCE - FMCG
Private labels growth was driven by strong growth of Discounters.
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Beverages 21.6%
Dairy Products 16.9%
Meat And Meat Products 15.4%
Packed Food 13.5%
Confectionery 11.2%
Personal Care 10.3%
Household Care 5.7%
Frozen Food 3.3%
Salted Snacks 1.6%
Baby Food 0.6%
2.0%
2.1%
1.9%
5.7%
2.0%
-0.9%
-0.1%
0.8%
2.5%
5.9%
3.9%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 15.8%
Top 6-10 7.4%
Top 11-30 15.1%
Top 31-100 16.0%
100+ 12.4%
Private Label 33.4%
2.0%
0.7%
-0.9%
1.3%
2.6%
1.0%
3.8%
105
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TURKEY SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Local government sources
Didem Sekerel
Erdogan
General Manager
Nielsen Turkey,
Connect
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
87 87 86 87 87 84
113 112
89 8879
87
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU TR
5.3
11.5
7.3 7.3
1.6
-3.0
10.612.3
10.2
12.8
19.4
22.4
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
Turkey’s economy continued its momentum, with GDP growth contracting to -3% in
Q4 (+2.6% for the year) amidst currency turbulence which started in August ’18 and
ongoing geopolitical tensions.
As exchange rates normalized throughout the quarter, inflation fell to 20.3% in
December from peak level of 24.5% in September. This is an encouraging sign
supported by renewed optimism among consumers with the Consumer Confidence
Index increasing eight points in Q4 driven predominantly by an improvement in
consumers perception of future job prospects.
As for FMCG market, the overall volume gain of 1.2% for the year indicates growth
has been possible despite price pressure. Body Care, Hair Care, Confectionery and
Dairy have been the fastest growing categories over the latest 12 months, in terms of
volume. The volume performance of those categories was mainly due to more
households shopping in Perfumery chains and small supermarkets (BIM&A101&SOK)
as they continued their rapid store expansion strategies.
Looking ahead, we should note that as exchange rate movements stabilize, inflation
has started to fall after its peak in September and consumer confidence has started to
recover. However, it is likely that it will take some time for those positive attitudes to
reignite consumer demand. In this environment, it is critical for manufacturers to
closely monitor changes in shopper behaviour throughout this turbulent period and
ensure pricing and promotion strategies are maximized for growth. Strategies that
focus on value for money (such as pack downsizing, maintaining existing price points)
will help consumers manage budgetary constraints. Innovation should also be high on
manufacturers’ agenda to reinvigorate consumer demand.
106
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TOTAL TURKEY – CHANNEL PERFORMANCE
Exchange rate turbulence has driven inflationary pressures in FMCG
resulting in negative volume growth in Q4’18.
Small supermarkets (including BIM&A101&SOK) and perfumeries growth
has been mainly driven by store expansion.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
FMCG: excluding Tobacco/Alcohol
9.5%
18.4%
6.1%8.6% 10.3% 12.4% 13.3% 13.7%
18.9%26.9%5.4%
1.2%
5.5%
6.0% 5.1%5.2%
2.8% 2.8%
2.1%
-2.7%
14.9%
19.6%
11.7%
14.6% 15.5%17.5%
16.1% 16.6%
21.0%
24.2%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
TurkeyUnit Value Growth Volume Growth Nominal Value Growth
19.6%
6.0%
13.2%
26.2%
33.2%
15.2%
Total FMCG Hypermarkets Large & Medium Supermarkets
Small Supermarkets* Perfumery Traditional Trade
4%
21%
47%
3%
25%
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Body Care, Hair Care, Confectionery and Dairy categories showcase strong volume
growth due to store expansion of Small Supermarkets and Perfumeries. Price
increases buoy Paper Products performance with negative volume growth.
TOTAL TURKEY – SUPER CATEGORIES PERFORMANCE
TOTAL TURKEY – MANUFACTURER PERFORMANCE - FMCG
Smaller manufacturers and Private Label are growing fastest as consumers
seek value offerings in the face of increasing prices.
FMCG: excluding Tobacco/Alcohol
*100+ includes private label brands
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Confectionery 21.3%
Non Alcoholic Drinks 21.0%
Dairy 13.1%
Grocery 12.2%
Housekeeping 8.0%
Paper Products 6.4%
Fats And Oils 5.4%
Body Care 3.8%
Ice Cream 3.2%
Hair Care 2.8%
Oral Care 1.3%
Grooming 0.8%
Other 0.7%
19.6%
19.6%
19.4%
22.0%
18.6%
20.8%
22.7%
12.2%
21.9%
15.9%
21.2%
17.2%
17.9%
26.6%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 23.8%
Top 6-10 10.8%
Top 11-30 17.6%
Top 31-100 14.7%
100+ 33.0%
19.6%
17.4%
15.7%
16.7%
16.3%
26.0%
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UKRAINE SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q4 18 GDP local government
Vaios Dimoragas
Managing Director
Ukraine and Belarus
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
2.4 2.3 3.1 3.8 2.8 3.4
16.2
13.9 13.8
11.5
9.09.7
Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
87 87 86 87 87 84
58 6158
62 6459
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
EU UA
Ukraine is approaching the Presidential Elections of March 2019 with positive
momentum, although Q4 was anything but dull. The martial law that was
announced at the end of November did not have serious implications in the
business sector but at the same time it did add to the uncertainty that has
belied the country for years. The consumer confidence dip by 5 percentage
points compared to the previous quarter can be directly associated with these
events, however this relatively controlled drop could be even interpreted as
resilience in the shoppers’ mood. GDP grew 3.4% in Q4, whereas inflation
seems to be more controlled at the long-awaited single digit of 9.7%. Income
growth was above these inflationary levels which is enabling Ukrainian
consumers to buy more products that they really want rather than only the
ones they absolutely need.
The strong FMCG growth continues, albeit, after a year of 20%+ growth, the
comparison with an already high base of Q4 2017, resulted in a slight slow
down in pace, both in value and volume terms. FMCG players at the
manufacturer and retailer side remain optimistic and predict that solid growth is
likely to continue in 2019, supposing no major surprises in the always volatile
Ukrainian political and retail environment.
Manufacturers and retailers should further exploit this positive momentum,
ensuring a good balance between winning share in commodity categories but
also exploring ways of assortment optimisation, to enable strategies and
tactics to increase penetration of newer, more innovative categories or less
widespread categories. The ‘new” Ukrainian consumers are ready to embrace
new products and services that will enrich their lives and it is up to
manufacturers and retailers to ensure both access and education of their
usage to ensure these products become part of consumers’ everyday lives.
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TOTAL UKRAINE – CHANNEL PERFORMANCE
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2018
FMCG market demonstrates a slight slow down in growth in Q4, expected
after a period of strong continuous uplift.
The global trend of convenience is also impacting Ukraine with stronger
growth of minimarkets and perfumeries.
21.4%
22.5%
31.7%
29.8%
13.6%
Total FMCG Hypermarkets/Supermarkets MT Minimarkets MT Perfumeries MT Traditional Trade
53%
13%
6%
28%
10.4% 11.4% 10.0% 10.0% 10.5% 10.8% 10.4% 11.4% 11.9%9.5%
5.5%
10.0%
1.6%
5.3%
8.4%10.7% 11.1%
11.0% 8.6%
6.6%
15.9%
21.4%
11.6%
15.3%
18.9%
21.5% 21.5%22.4%
20.5%
16.1%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
UkraineUnit Value Growth Volume Growth Nominal Value Growth
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Confectionery and snacks are seeing strong growth as Ukrainian consumers’
higher incomes allow for more indulgence of impulse products.
TOTAL UKRAINE – SUPER CATEGORIES PERFORMANCE
TOTAL UKRAINE – MANUFACTURER PERFORMANCE - FMCG
Retailers have increased their focus on Private Label with greater assortment
and quality accounting for the highest growth.
MAT Q4-2018 MAT Q4-2018
MAT Q4-2018 MAT Q4-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Beverages - Alcoholic 21.5%
Beverages - Non Alcoholic Rtd &
Not Rtd21.0%
Confectionery & Snacks 18.4%
Dairy Products 12.3%
Personal Cleaning & Hygiene 9.2%
Household 5.1%
Seasoning & Sauce 3.7%
Baby Care 2.2%
Meals/Meal Mixes Shelf Stable 2.1%
Pet Food 2.1%
Baby Food & Drinks 1.8%
Desserts/Cakes/Sweet Products 0.6%
21.4%
18.3%
21.2%
25.3%
19.1%
20.2%
25.7%
15.9%
23.9%
24.3%
30.4%
26.5%
26.9%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 23.7%
Top 6-10 13.2%
Top 11-30 23.6%
Top 31-100 20.5%
100+ 13.1%
Private Label 6.0%
21.4%
20.0%
18.9%
23.3%
20.0%
21.6%
30.3%
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CHANGING CONSUMER PROSPERITY
TOP 5 CATEGORIES CONSUMERS
ARE WILLING TO PAY A PREMIUM
CLOTHING/
SHOES
33% PERSONAL
ELECTRONICS
32% MEAT/
SEAFOOD
31%
COFFEE/TEA
27% DAIRY
24%
27%
TOP 5 CATEGORIES CONSUMERS
ARE SPENDING MORE ON
GROCERIES
39% UTILITIES
33% HOUSEHOLD
GOODS
RENT/MORTGAGE
25% TECHNOLOGY &
COMMUNICATION
25%
WORSE SAME BETTER
37% 32% 31% 48%
42%
10%
For Better or Worse – How Consumer Spending is Evolving
HOW CONSUMERS FEEL ABOUT
THEIR FINANCIAL SITUATION
STILL NOT ALL
CAN SPEND FREELY
“I’m able to
spend freely”
“I live comfortably
and am able to
buy some things
because I want
them.”
“I only have enough
money for food,
shelter and basics.”
5 YEARS
AGO
2013
TODAY
2018
VS.
CAUSED BY
GROWING DISPARITY
OF INCOME
DISTRIBUTION
INCREASING
COST OF LIVING
CHANGING SPENDING
PRIORITIES
FOR MORE INFORMATION ON ‘CHANGING CONSUMER PROSPERITY’ AND HOW TO WIN CONSUMERS’
WALLETS DOWNLOAD THE REPORT AND REACH OUT TO YOUR NIELSEN CONTACT.
EUROPE
Source: Nielsen Global Premiumization Study 2018
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Economy Watch
% GDP per annum growth sourced from Economist Intelligence Unit (EIU)
Inflation, consumer prices % change per annum sourced from Economist
Intelligence Unit (EIU) or from local government statistics offices where
unavailable.
The Conference Board® Global Consumer Confidence Survey is conducted
in collaboration with Nielsen. - Survey is based on respondents with Internet
access. Index levels above and below 100 indicate degrees of
optimism/pessimism. Q1 2017 CCI results are unavailable this quarter due to
a Nielsen global survey service enhancement.
FMCG Market Dynamics - compares overall market dynamics (value and unit
growth) in the Fast Moving Consumer Goods sector based on the sales
tracking Nielsen performs in the mentioned markets. The FMCG definition is
based on the widest possible basket of product categories that are
continuously tracked by Nielsen in each of these countries and channels.
Nominal value growth: Percentage change in value sales (expenditures) as
measured by the total basket of reported product categories
Unit value growth (≈ ‘price’ change):
• The change in average price per unit may result from:
• Price changes of individual products
• Change in the mix of purchased products; more or less expensive
products, more or less promotions, etc.
• Channel switching; more or less purchases in discount stores, or
hypermarkets, or convenience outlets, etc.
• Product or channel mix changes may be induced by price change
or may just be the result of market dynamics.
• The unit value growth reflects how consumers experience ‘cost of
living’ in their actual grocery shopping behaviour.
Volume growth: Percentage change in purchased volume (quantity) of
products
Super Category Performance – definition of Super Categories are based on
local market definitions
CLICK HERE FOR DETAILS
DEFINITIONS AND SOURCES
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ABOUT NIELSEN
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company, Nielsen has operations in over 100 countries, covering
more than 90% of the world’s population. For more information, visit
www.nielsen.com.
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