Quarter By Numbers Q3 2018 - Switzerland In Focus
The Swiss economy has experienced an impressive performance in 2018 with GDP increasing rapidly over several quarters, employment on the rise, and consumer sentiment in Switzerland jumping seven points from the second quarter — now at an index of 106. Reflecting the positive macroeconomic conditions, the Swiss FMCG market continues to grow, up 1.0% in total value over the last 12 months. Q3 saw a value growth of 1.5% due to price increases of 2.1% while volume sales contracted - 0.6%. The unusually warm weather in Q3 is the main driving force behind the positive development as sales of Non-alcoholic Beverages and Frozen food (ice cream) jumped due to the prolonged summer.
Supermarkets, and in particular small Supermarkets and Discounters, profited the most from this growth, while Department stores continue to lose relevance due to market positioning, strong competition, and increased price pressure. The noticeable upturn in the Swiss franc in the wake of increasing international uncertainty over the summer months has further intensified price pressure on cosmetics and other Personal and Household care categories — which further contributes to the pressure on Department stores.
When looking for areas of growth, we see great growth opportunities for Swiss FMCG products both domestically and abroad. The domestic economy is projected to be strong in 2019, with private consumption likely to make gains. Analysts expect the job market to strengthen further, with a moderate increase in real incomes — therefore strengthening households’ purchasing power. Trends such as convenience, sustainability and digitalization are increasingly important, and will continue to shape today’s shopper behaviour. For manufacturers and retailers to win in this environment, investing in these trends is integral for future growth. We’re seeing quite a few retailers, and in particular Discounters, continuing to adapt to these needs, optimizing their assortment, modernizing their shops and investing in communication. Going forward, we see great growth potential for retailers that focus on enjoyable shopper experiences, while providing a wide range of fresh food.