Brussels, 28 March 2018. The amount Europeans spent on groceries rose by 4.4% in the final quarter of 2017 – the highest rise since early 2012, according to Nielsen retail performance data.
This 4.4% increase in takings at the tills – across the 21 European countries measured – was due to shoppers buying 1.8% more items and paying 2.6% more per item than they did a year ago. The higher prices were a combination of price inflation and shoppers actively choosing more expensive goods.
“After a few tough years, 2017 saw a dynamic economic environment across Europe with positive consumer confidence in the region and record highs in several countries,” said Olivier Deschamps, Senior Vice President Retailer Services Europe. “This contributed to a strong year for grocery retail, particularly impressive considering shoppers’ savings mindset such as looking for the best deals and a bigger preference for the discounters.
“One of the reasons for the growth against this backdrop is the performance of local brands over the leading international players. They’ve capitalised on the revival of “local pride”, tapping into consumer and retailer tastes towards premium, local champions, particularly the focus on health and wellness through organic and free-from ingredients. Health now being one of Europeans’ two biggest concerns.”
In comparison in Belgium, price paid rose 2.1% in the fourth quarter, while volumes declined -0.3%, meaning total grocery – or what the industry calls fast-moving consumer goods (FMCGs) – spend increased +1.8%.
“The Belgian FMCG market grew 1.3% in the whole of 2017, which is slower than GDP growth and with volume sales dropping slightly,” said Pedro Lima, Managing Director of Nielsen Benelux. “Belgium’s FMCG price gap has widened versus neighboring countries over the past 15 years, creating cross-border competition for consumers. Over half of Belgians surveyed say they’ve changed habits to cut down on household spending, with 57% of this group saying they’ve switched to cheaper grocery brands to save on household expenses.”
Turkey had the highest year-on-year growth in takings at the tills (+16.8%), followed by Hungary (+8.2%) and Slovakia (+7.5%). In contrast, Switzerland (+1.6%), Finland (+1.7%) and Belgium (+1.8%) had the smallest growth. Belgium ranked 19th of the 21 countries.
Spain’s growth rate (+5.3%) was the highest among the big five western European markets, followed by the UK (+4.0%), whilst France had the lowest growth among this group (+2.8%).
“Despite GDP growth slowing slightly in some of the Eurozone's largest economies, the IMF puts 2018 GDP growth at around 2%, which suggests that economic stability will continue to support grocery sales in Europe,” notes Deschamps. “Two growth areas in particular to look out for are e-commerce and private label. Retailers continue to revamp their own brands, upgrading ranges and investing in marketing to tap into consumer needs around competitive prices but good quality.”
Unit Value Change = the change in the price paid by a shopper for a unit (item), as a result of price inflation, and/or the shopper substituting a unit of one value for a unit of a different value.
Nominal Value Growth (or the change in takings at the tills) = Unit Value Change + Volume Change
The Nielsen Growth Reporter compares overall market dynamics (value and unit growth) in the FMCG sector across Europe. It is based on the sales measurement that Nielsen performs in 21 European markets, and covers sales in grocery, hypermarket, supermarket, discount and convenience channels. It’s based on the widest possible basket of product categories that are continuously measured by Nielsen in each of these countries and channels.
Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers Watch and Buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services across all devices where content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen provides its clients with both world-class measurement as well as analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90 percent of the world’s population. www.nielsen.com
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