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European FMCG outlook begins to brighten

Sales up 3.8% – highest growth for over two years

London, 19 August 2014 – FMCG sales growths are looking rosier. For the second quarter of 2014, aggregated across Europe, they were up 3.8% year-on-year, according to the latest figures released today by global information and insights company Nielsen.

The 3.8% nominal value rise, the highest for over two years, was driven by 2.2% price inflation and a 1.6% rise in sales volumes. The last time value rose more than 3.8% year-on-year was Q1 2012 (4.7%).

Price inflation is at its lowest level for over three years (2.1% in Q1 2011) while the volume rise was the highest for three years (2.1% in Q2 2011).

Nielsen’s European director of retail insights Jean-Jacques Vandenheede comments: “These sales figures are impressive, boosted by Easter – when spend typically increases – falling in Q2 this year, but in Q1 last year. And while we estimate this calendar anomaly accounted for about 1% of extra volume sales, a ‘normalised’ view is that overall sales value is still up around a healthy 2.8% – which is more positive than it has been recently.”

In Q2, Turkey experienced the highest nominal year-on-year sales growth (+12.7%) among the 21 European countries measured, followed by Hungary (+6.4%) and Norway (+6.0%). Of the big five western European markets, Germany (+3.5%) had the highest nominal growth.

E.g. Europe’s 3.8% value sales growth was accounted for by a 2.2% increase in unit value (price inflation) and a 1.6% increase in unit sales (volume)

Only three of the 21 countries experienced a year-on-year decline in nominal value growth; Ireland (-1.7%) had the largest decrease followed by Greece and Finland (both -1.1%).­

Price inflation

The nominal increase in FMCG sales value across Europe is being driven by price inflation rather than volume increases. European FMCG price inflation was 2.2% year-on-year in Q2 2014. Only two of the 21 measured European countries experienced price inflation above 3.0% (Turkey and the Czech Republic); four experienced year-on-year deflation.

Volumes

European FMCG sales volumes in Q2 2014 increased 1.6% year-on-year. Over three-quarters (16) of the 21 countries measured experienced an increase in volume sales; Hungary and Norway (both 4.2%) seeing the largest rises.

Vandenheede concludes: “The outlook for the European FMCG market is beginning to brighten. Although there’s been much talk about price deflation, this is limited to a handful of countries and certainly isn’t something happening at a Europe-wide level. Furthermore, the worst is probably over in terms of negative volume growths; even without the late Easter, volume growths would have been up for the first time since Q3 last year. Thus, we anticipate overall value growths to reach around 2% during the next quarter.”

About the Nielsen Growth Reporter

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.

About Nielsen

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands.