Through the second half of 2010, the pace of recovery is split between lagging developed economies that are mired in an economic malaise and developing economies primarily located in the East that exhibit strong levels of consumer spending. The number one consumer concern continues to be those tied to economic conditions, most specifically, the labor markets. These concerns are negatively impacting shopper trips and consequently consumer spending.
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Overall, consumers worldwide remained cautious regarding pace and sustainability of the recovery as dollar and unit volume remain near neutral levels (in the -1% to 1% range). A summary of spending trends in 15 key countries is outlined below. The full report, State of the Global Consumer is available for download.
Longer term, with 30 of 31 countries showing positive ad spending in the in the 2nd quarter of 2010, global consumer spending may receive a boost in the back end of 2010 and 2011 as consumers remain focused on promotional activity.
Low U.S. consumer confidence is reflected in continued spending restraint as consumers continue to reduce overall shopping trips and spending even with better prices and increased promotion support. Detailed North American Review.
Consumers are still focused on value, shopping more at discount retailers and buying more on promotion. National brands are a key driver of promotions, which are currently outperforming private label. Detailed North American Review.
France & Spain
Volume and value shares are growing in the 1-4% range. In France, consumers are spending more per trip, but they are not shopping more frequently. The opposite is true in Spain where consumers are shopping more frequently (despite high unemployment rates), but not spending more per trip.
Germany & Italy
Volume and value shares are declining as shoppers are not shopping more frequently and are not spending more per trip.
Volume shares are neutral, but value shares are up. Shoppers are shifting to value channels to save money.
Austria & Switzerland
Volume and value share show no significant change from three months ago. Store brands and value channels are on the decline, but retail promotions are up.
Volume growth continues as items sold grew 4.1% in volume, with an emphasis on beverages, which grew 7.3%, followed by perishables at 6.5%.
Taiwan’s fast-moving consumer goods market remains positive, mainly driven by personal care categories where cosmetics are a leading department with close to 20% growth. In food and beverages, nutritional supplements outperformed the total market.
Value growth is ahead of volume trends with growth being driven by non-food vs. food categories such as baby products, which continue strong sales.
Fast-moving consumer goods growth was revived in Q2 2010, fueled by double digit growth of food categories. Innovations in terms of smaller trial packs coupled with heavy promotions and new application products dominated the market scene. Modern trade channels dominate, which is driven by the market leaders.
Consumer confidence in China has now reached a high point (index=109). As such, fast-moving consumer goods sales continue to grow and accelerated consumer spending is reflected across both food and non-food categories.