Low consumer confidence levels and reduced consumer spends have slowed down FMCG growth in Europe
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 TY1, 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 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. Switzerland ranked last of the 28th 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 Switzerland rose 1.2% while volumes fell -1.6%, meaning total grocery – or what the industry calls fast-moving consumer goods (FMCGs) – spend fell -0.4%.
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1 MAT TY: Moving Annual Total This Year