Brussels, March 18, 2019, 10h00 CET: The amount Europeans paid for everyday groceries (on the widest possible basket of product categories that are continuously tracked by Nielsen) increased by +2.3% in Q4 2018, relatively lesser as compared to +3.8% in Q3 2018.
Multiple indicators suggest slowing down of the economy in large European countries especially in the fourth quarter of 2018, leading to FMCG nominal growth levels of +3.1% MAT TY, which is exactly similar to the growth rates recorded in the year 2017. The volume growth in Q4 2018 has been recorded at negative levels (-0.4%) — lowest volume growth (-0.5%) recorded since Q1 2017.
“Overall spending in Europe has been affected due to slowdown in large economies such as Germany and Italy, along with slower consumption from consumers in countries such as the UK,” said Pedro Lima, Managing Director Nielsen Benelux. “While the previous quarter reportedly displayed a positive pick-up in growth numbers, it has now tapered down in the fourth quarter. According to the Nielsen study, discounter growth in Western Europe also slowed to +2% and is now the same as that of supermarkets or hypermarkets. FMCG sales are being affected with fewer trade promotions by discounters and also slowing down of sales from convenience stores, that are considered as growth drivers in FMCG.” Lima concluded.
Overall this year, despite some upward trends in nominal growth value in first and third quarter of 2018 (+3.9% and +3.8% respectively), it can be noticed overall growth for the year (+3.1%) has been dampened by fourth quarter growth numbers – due to dampening as consumers have become cautious towards their FMCG spending and buying 0.4% lesser percentage of items and paying 2.7% more per item than they did in the same quarter last year.
How different countries compare?
Turkey continues to show the highest year-on-year growth in takings at the tills (+24.2%), contributed due to inflation; however there is a decline in volume growth (-2.7%) in Q4 2018. Other countries that have recorded high growth numbers are Hungary, Poland, Norway and Sweden (+5.5%, +4.3%, +2.7%, +2.5% and +2.2% respectively). On the other hand Switzerland (-0.4%) had the smallest growth. Belgium ranked 26th of the 28 countries.
Spain had the highest growth rate (+2.2%) among the big five Western European markets, followed by Italy and UK (1.4% and 0.8% respectively), whilst Germany had the lowest growth among this group at zero growth levels.
In comparison to the European average, the prices paid in Belgium rose 1.6% while volumes fell -1.3%, meaning total grocery – or what the industry calls fast-moving consumer goods (FMCGs) – spend grew 0.2%
“Here in Belgium, as price and inflation are dominating topics within the Belgian FMCG market, Q4 developments were relatively in line with the preceding quarters,” said Lima. “What’s interesting to see is the significant expansion of Superettes, which experienced a 5.8% growth this quarter. This development shows the growing importance of the convenience channel in Belgium, and the great opportunities this can bring for both manufacturers and retailers.”
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
About the Nielsen Growth Reporter
The Nielsen Growth Reporter compares overall market dynamics (value and unit growth) in the Fast moving Consumer Goods sector across Europe. It is based on the sales measurement that Nielsen performs in 28 European markets, and covers sales in grocery, hypermarkets, supermarkets, 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.