Jean-Jacques Vandenheede, European Business Insight Director
Recovery in the West, Deterioration in the East
The first quarter of 2010 shows a positive trend in nominal value growth rates in most countries, which was driven primarily through volume growth improvement. France’s 2.4% year-on-year nominal value increase was the result of inflation while Portugal’s 4% volume growth and Spain’s 3% volume growth can both be attributed to a decline in deflation. Hungary and The Czech Republic were the poorest performers in the region, reporting nominal value declines of 3.5% and 3.2% respectively.
With a marginal reduction in shopping trips in the first quarter across Italy and Germany and flat overall spending per trip in the top five European countries (Germany, Italy, France, United Kingdom and Spain), shopping behavior is stable, but shows no significant improvement.
However, the economic turmoil reached Eastern Europe with a 12-month lag. In the latter part of 2009, these eastern markets severely deteriorated with volume decreases occurring in Latvia, Lithuania, Russia, Serbia and Ukraine. Albania, Bosnia and Macedonia remain the positive exceptions. With this sudden and delayed worsening in the east, a steep upturn will now be necessary to return to full recovery.
Europe Total View Q1 2010
Positive Growth Trends
Across Europe, nominal value growth continues to climb, increasing to 4.1% in the first quarter of 2010, a 1.2 percentage point gain over the fourth quarter 2009. The steady gain in volume coupled with latter unit value growth has kept Europe on an uphill trend with momentum continuing to build from the low point in the third quarter of 2009 when nominal value plunged to 2.6%.
The volume growth rate accelerated in most countries: Norway (7%), Finland (5%), Sweden (4%), Portugal (4%), Slovakia (4%), Austria (3%), Ireland (3%), Italy (3%), Spain (3%), Belgium (2%), Poland (2%), Switzerland (2%), Denmark (1%), France (1%), Germany (1%), Netherlands (1%) and U.K. (1%). Both volume and unit value declines were reported in Hungary, Czech Republic and Greece.
Country Analysis—A Divided Europe
The latest quarterly Europe Growth Reporter measuring volume and value sales in the fast moving consumer goods industry across markets in Europe is showing encouraging signs of improvement with all but four countries measured recording positive volume trends, which have helped drive increases in nominal value growths across the region. Unit value, however, shows an even split, with increases reported in eight countries and declines shown in eight. Four countries report flat unit value.
Turkey shows the most significant spike in unit value, increasing 21% since last year, which has unsurprisingly lead to volume decline (-1%). Russia has experienced double digit growth in unit value (+11.4%) once again and here volume declines remain significant (-7.2%), though they are slightly improved from Q4 2009 (-8.7%). The Nordic countries of Norway and Finland report the greatest increase in volume, rising 7% and 5% respectively, driven by deflation in Finland and low unit value growth in Norway. Sweden also reported low unit value growth although volume growth was lower here at +4%.
About the Nielsen European Growth Reporter
This report compares overall market dynamics (value and unit growth) in the fast moving consumer goods sector across Europe. It is based on the sales tracking Nielsen performs in every European market, and covers sales in grocery, hypermarket, supermarket, discount and convenience channels.
The report is based on the widest possible basket of product categories that are continuously tracked by Nielsen in each of these countries and channels, and this edition reports on week two of 2010 through to week 14 of 2010.