BUSINESS

GFK: Retail to grow by 7 pc in 2016, average European growth rate at 1 pc

According to GfK’s European retail report, last year’s retail consolidation will continue this year too. For EU countries, the growth will average approximately 1 percent (based on nominal Euro values). There will be positive developments particularly in Romania (+7 percent), in the Baltics (around +5 percent), which are gradually catching up with more mature markets, in Sweden (+5 percent) and Spain (+4 percent).

In 2015, the economy grew and the unemployment rate dropped in most countries, a development that was reflected in the purchasing power that grew by an average of 3.7 percent year-on-year in the European Union. This gave each EU citizen an annual average of EUR 15,948 for consumption, rent, savings and pension contributions.

The market indicators assessed by GfK for the 33 European countries analysed are purchasing power, retail spending as a share in total household expenditures, inflation rate, profitability of retail spaces.

In 2015, European consumers enjoyed low costs for energy and fuel, as well as a good economic situation and a growth of income in many European countries. Nevertheless, retail was not among the main beneficiaries of these favourable conditions. Consequently, the downward trend of retail spending’s share in total household expenditures continued in 2015 too. The average level for all countries is 30 percent. While consumers have more money at their disposal, according to the GfK report, they spend them mainly on services, travel and recreational activities rather than on retail consumption.

Inflation rate expectations are mitigated by the low prices of raw materials. Many European countries registered deflation last year. Nevertheless, for 2016 the European Commission forecasts price drops only in Slovenia (-0.3 percent), Romania (-0.2 percent), Lithuania (-0.1 percent) and Bulgaria (-0.1 percent).

 

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