CONSUMER SPENDINGS AND SHOPPER TRENDS IN CEE · 3 GfK Indicator EURO Climate (1) Source: GfK, EU-Commission Rise in consumer confidence 2015-60-40-20 0 20 40 60 r s Hungary Slovakia

1

NEUSICHT

CONSUMER SPENDINGS AND SHOPPER TRENDS IN CEE

7. GROW EAST CONGRESS - 17TH MARCH 2016

Tobias Schediwy, GfK

2© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy

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3

GfK Indicator EURO Climate (1)

Source: GfK, EU-Commission

Rise in consumer confidence 2015

-60

-40

-20

0

20

40

60

Indi

cato

rpoi

nts Hungary

Slovakia

Czech Republic

Austria

1506 07 08 09 10 11 12 13 14

Croatia

4

GfK Indicator EURO Climate (2)

Source: GfK, EU-Commission

Rise in consumer confidence 2015

-60

-40

-20

0

20

40

60

Indi

cato

rpo

ints Poland

Romania

Bulgaria

Austria

1506 07 08 09 10 11 12 13 14

Germany

5

Print

TV

Sales person

Display

Free trial

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

297 294 285 277 281

Smart-phone

Youtube

Website

Facebook

OnlineVideo

Online Banner

WOMProduct Tests

LoyaltyProgram

Coupons

Blogs

e-couponm-coupon

Local Ads

Online portal

Search Engine

Leaflet

The challenge: An increasing number of touchpoints and at the same time less chances to reach shoppers at POS

Source: GfK Consumer Panel© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy

6

Shopping Frequency continues to drop

75

80

85

90

95

100

105

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Index vs 2002

12 countries W Europe and 7 countries E Europe

Western Europe

Eastern Europe

Source: FMCG Global Trend, Inflation the Economy

Fewer opportunities to grab shopper attention

© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy

7

FMCG Growth in CEEPackaged FMCG, % change 2015 vs 2014

+15

+21+3

+2-1

+3+10

+4

+/-0

+5

+1


8

Russia Recession continuing in 2016

5,2

-7,8

4,5 4,3 3,4 1,3 0,6

-3,7 -0,9-10

-5

0

5

10

2008 2009 2010 2011 2012 2013 2014 2015 2016*

GDP(%)13,3

8,8 8,86,1 6,6 6,5

11,4 12,99,2

02468

101214

2008 2009 2010 2011 2012 2013 2014 2015 2016*

Inflation(%)

Source: Rosstat, Finam.ru, European comission, Citibank, Goldman Sachs, GfK analysis, *forecast

6,2

8,3 7,3 6,55,5 5,5 5,2 5,7 5,8

0

5

10

2008 2009 2010 2011 2012 2013 2014 2015*2016*

Unemployment(%)2014 2015 2016*

Exchange rate, RUB/USD38,6 66,9 68,8

Brent Crude oil price, USD per barrel 99 54 40

Macroeconomic indicators forecasts

9

RussiaMain crisis adaptation consumer strategies

Source of information: GfK Rus Data

Refusal to buy some goods and services

Rationality of choice, refusal to do impulse

purchasesSearch for promo Increase of price

sensitivity

Reduction of eating out

Downtrading –transition to the cheapest goods

Switch to the cheapest outlets

Choice of economic packing formats


10

Example BreadChange of consumer behavior – back to baking at home

Source: GfK Consumer panel

-4.6%

Key Facts: Sales volume change 2014 vs. 2013, %

+12.5%

+14.2%

+1.8%

+4.4%

11

Poland: deflation and volume decline, but some uptradingFMCG Value Trend Components

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

2008 2009 2010 2011 2012 2013 2014 2015

Food price inflation Volume Uptrading Value

12

3 7 4 5 7 6 4 7 2 3 7 9 4 767

5 79

2 5 1019

4 5 1611

43

12 3 73

12 4024 15

11 1920

612 26

29 23

20

2647

20

72

11

1

1

21

11

1

1

2

1

18

55

2

5

23

26

1

1

1

3

25

18 1418

2626 8

10 9

71

18

6

13 619 2

20

2

3517

2418

1714 16

15 20

1812 12

13

67

2133

27 2414 18 16

27 27

5 2 19 7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

AT CZ SK HU PL RU BG RO HR RS UA* KZ TR ZA

Discounters on the rise - strongest store format in Poland and RussiaValue shares (%) of store formats 2015

Modern TradeShare (excl. Drug stores)

%**83 69 66 62 58 61 40 53 56 24 22 15 42 80

Sources: Consumer Panels, Base: Tillroll or FMCG Total (depending on country), * w/o Crimea **Modern Trade Share: Hypermarket, Supermarket, Discount, Cash&Carry© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy

Hypermarket

Supermarket

Minimarket

Discount

Drug Stores

Cash & Carry

Small Grocery ShopsStreet Vendors + Open MarketsSpecialized shopsOthers

13

Promotion Shares at all-time high in CZ, SK and HRPackaged FMCG, value % 2015

14

440

2040

1518

28

22

52

32

20


14

But: Increasing promotions does not help the category growExample Czech Republic

Source: YTD 2014 vs Year Ago, based on 150 measured categories on Consumer Panel in Czech Rep

0

20

40

60

80

100

120

140

160

180

200

0

20

40

60

80

100

120

140

160

180

200

Increased Promo Share Index Growth in Volume %

Strong Promo GrowthIndex > 120

ModeratePromoGrowth

120 > Index > 100

Stable/DecreasedPromo

Index < 100

150 categories


15

.. and more promotions do not lead to market share growthExample Czech Republic


16

Private Label shares stagnating in most countriesPackaged FMCG, value % 2015

7

326

1422

105

28

18

20

31

38

Base: FMCG excl. FreshShare of promo purchases of total household expenditures, Value %, 2015© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy

17

Brands constantly need to attract buyersThe average brand loses 55% of buyers from last year

Brand analysis based on 9296 top brands in 16 countries in 79 categories. Index shows brand price relative to category PL

Source: BG20 Update - June 2015

THIS YEAR NEXT YEAR


18

Brands must CONTINUOUSLY replenish TO STAND STILL and recruit TO GROW

Brand analysis based on 9296 top brands in 16 countries in 79 categories. Index shows brand price relative to category PL Source: BG20 Update - June 2015

THIS YEAR

Retain

Replenish

Grow

NEXT YEAR


19

Six share growth tiers are based on absolute change per year for 8081 top 10 category brands in 79 categories in 16 countries: For example the “Top 15%” tier contains the15% of brands with the highest absolute market share gain between 2010 and 2013.

1,5

0,30,1

-0,1

-0,4

-1,7

1,8

0,50,1

-0,3

-0,9

-2,1-2,5

-2

-1,5

-1

-0,5

0

0,5

1

1,5

2

Top 15% Next 15% Other winners Other Losers Next 15% Worst 15%

Share winners Share losers

Change / year 2013 vs 2010

n=9918 brands from 16 countries

Finally, what drives brand growth?Penetration drives shares

Penetration refers to the percentage of category buying households buying this brand.Frequency refers to the number of purchases for a specific brand per household per year.

Source: BG20 Update - February 2015

Yearly volume share changeYearly penetration changeYearly frequency change


20

-150

-100

-50

0

50

100

150

-150 -100 -50 0 50 100 150

Cha

nge

insa

les

Change in buyers

R²=0,7593

Sales growth strongly correlated with buyers – penetration is keyExample Hungary

Change in sales and buyers in MAT Aug 2015 vs. YA (in %)


21

E-Commerce FMCG: Only a handful of countries with >1% shareOnline share and penetration

13,4

3,9 2,1 3,21,2

6,0 4,30,7 1,4 1,2 0,8 0,5 0,2 0,9 0,6 0,8 0,2 0,2 0,3 0,3 0,2 0,2 0,0

0,6 1,4

59,5

45,5

39,1 38,335,9

24,7 24,2 23,020,7 19,2 18,5 16,9

11,78,2 7,2 6,3 6,0 4,2 3,9 3,6 3,5 2,8 2,6 0,8

Online share in value

% penetration e-commerce

Source: E-Commerce Status 2014 – MAT March 2015, in a few countries 2014 © GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy

22* Future BG20 analysis will explore more behavioural and attitudinal factors to understand their impact on driving brand growth

Potential pathways to growth?

Promotional Pressure

Assortment width

Innovation

Price Prem vs PL

Price Increase

Physical Presence

€Vol Share Growth

P

P

P

P

P

23

Thank you.

[email protected]

Documents

CONSUMER SPENDINGS AND SHOPPER TRENDS IN CEE · 3 GfK Indicator EURO Climate (1) Source: GfK, EU-Commission Rise in consumer confidence 2015-60-40-20 0 20 40 60 r s Hungary Slovakia