RSS
Analysis: the market of consumer goods will grow by over 12% this year
The market of consumer goods, this year, will have an advance of over 12%, evolution stimulated by the growth of demand, as a result of the increase of salaries and pensions, and not last, the advance of prices, shows an analysis of the consultancy company Frames according to which the Christmas shopping season will boost the results in the whole Romanian commerce, from the food sector to the consumer goods.
‘After the advance of 8% of 2018, the market of consumer goods (FMCG) which includes mostly acquired consumer goods (food, fizzy drinks and health care products, etc.) will grow this year by over 12%, estimate the analysts on the basis of the preliminary data obtained on the market’ the press release of the company says.
According to the analysis, the food sector is this year in the foreground as well,on the whole with a turnover of over 13%, boosted by the growth of the demand and as a result of the increase of the population income, on the other hand, on the significant advance of the prices.
‘During Christmas and New Year’s Eve, food and drinks get a peak in sales, over the level during Easter. The main players on the market bet on a plus of 5-10% of the turnover during this season’ the analysts say.
In 2018, the business in the food sector surpassed the threshold of 100 billion lei up by approximately 6 billion lei against the result of 2017. According to the Frames data, the dynamics of the market is influenced this year, more than before, by the effects of inflation.
The statistics show that the consumption prices of November 2019 (the last part for complete data) as compared to November 2018 have increased by 3.8%, the annual rate calculated on the basis of the harmonized indicator of consumption prices (IAPC) being 3.7%, the Frames analysts say.
Against December 2018, important growth has been recorded by the price of potatoes, by 20.6%, fruit and tinned fruit by 15.9%, tobacco and cigarettes by 7.65%, meat and meat produce by 5,8%, fuels by 5.6%.
On the basis of income increase and especially on the basis of the consumption habits well rooted in a past deprived of goods, the Romanians have got to spend on food the most in the EU, almost 28% of the total of the expenses for consumption. In the ranking, Romania is followed by Lithuania (20.9%) and Estonia (19.6%) while the European average is 12.1%.
A report of Nielsen Growth Reporter which compares the global dynamics of the market ( the growth in value and units) in the sector of consumer goods in Europe ( Fast Moving Consumer Goods, FMCG)’ placed, otherwise, our country among the markets with the highest growth in the 28 European countries’ (10.4% after the first six months).
The Romanians had, on average, this year, total income of 4,764 lei per household and 1,838 lei per person and expenses, estimated at 4,049 lei monthly per household (1,562 lei per person) represented 85%.
In October, the last month for which there are statistics, the average net salary income was 3,116 lei, up against the previous month by 34 lei (+ 1.1%).
The statistics show that almost 60% of the income went towards consumption, 32% to taxes and needs connected to household and only 0.8% for investment ( buying or construction of houses, lands and necessary equipment for household production, shares, etc).
‘The Romanians have spent in 2019, over 30% of the income on food and non-alcoholic drinks, 14% on household expenses (utilities), over 8 percentage points on alcohol and cigarettes, 8% on clothes and footwear, 7.5% on transport, 6% on furniture and house furbishing, over 5% on health, almost 5% on communication services (TV, internet, phones), 3% on cultural products and only 2% on hotels, restaurants and bars’ the analysis says.
The analysts in Frames consider that, from the perspective of the buying behaviour, the families in Romania went shopping as often as compared to the previous year, but the average sum paid increased by over 8%, influenced mainly by the growth of prices and by the extension of the consumption habits based on supply of products and services more and more varied.
The hypermarkets and supermarkets have mostly often visited by buyiers in 2019. At the same time, discount shops generated a frequency of consumption higher than before, equal to the presence of supermarkets which managed in 2019 to get in the populated areas, by opening hundreds of shops.
From the point of view of consumption, beyond fresh and wrapped food which generate the majority of sales, 2019 brought a growth of the appetite of the consumers for products in the area of personal health care and house care (detergents, universal products, etc.) the analysis says.
2019 generated sales up by over 15% in the area of products destined to house design, from construction materials to furniture and accessories. In the first three quarters of 2019 there were in operation 46,437 residences, up by 6,059 residences, against the same period of the previous year, and the perspective shows a volume, at annual level, of over 60,000 residential units.
‘The expenses to furbish the new residences have been added as well as those for doing up the already existing ones. Having more money at their disposal, the Romanians invested significantly, beyond electronics and appliances to acquire furniture, accessories and services’, the analysts say.
According to the Frames analysts, 2020 will be a year full of challenges for the market of consumer goods. Inflation, depreciation of the leu
and the reduction of loans will be the first to count, and these issues will influence the evolution of consumption, they will stop the appetite of the Romanians for purchasing. ‘The macroeconomic perspective is not positive, inflation is at a high level, and the euro/leu exchange rate will get to new maximum level under these conditions, it is not impossible that the advance of consumption to be slowed down and we should assist, most probably, a reorientation of consumers, firstly, towards goods of bare necessity’ Adrian Negrescu, Frames manager says.
The slowing down of the tendency of consumers would be influenced by the decisions of the government as regards salaries and pensions. ‘In an electoral year, there is to be seen in what measure the state will influence, through public policies, the trust of consumers în the economy’ he also said.
‘Shopping online will continue to grow in 2020, as, over the last years, in the area of delivery have been made massive investments and the shoping sites have developed more and more appealing offers.Moreover, the worries of Romanians connected to the security of internet tradings have significantly calmed down, the proof being the spectacular results of the Black Friday 2019 shopping campaign’ the analysts say.
According to the experts, it is expected that in 2020 the companies, especially the ones in the area of food retail continue investments in automation (self-service cashiers) and development of online and offline offers personalized for consumers, through programmes for loyalty which are more and more aggressive.
In the dynamics of the consumer goods market in 2020 a significant word will be given by the foreign evolution. ‘For Romania, an economy which lives out of consumption, a possible crisis, economic recession at European level would have negative consequences direct on the dynamics of the market. There is to see how much the alarm signals drawn by the foreign experts will be according to the reality’ the specialists say.