How have the Romanian shoppers found their way through the crisis
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Mai 2011 |
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ACNIELSEN ROMANIA S.R.L. |
Adresa
Strada Munţii Tatra, Nr. 4-10
Etaj 1-2
Bucureşti, Sector 1
Telefon
+40-21-310.67.73/77/81
Fax
+40-21-310.67.72
Website
www.nielsen.com
The economic crisis has put to a hard test people’s ability to cope with the unknown and has changed their behavior for ever. Cautiousness and frugality are now the new “cool”, as consumers have become extremely reluctant to impulse purchases and waste.
Simply put, the above describes the new attitude of consumer in Europe, as a result of the crisis. This situation has heavily impacted their lives and hopes for the future, which resulted in the lowest levels of confidence, especially in Eastern Europe, as measured by Nielsen.
The end of 2010 saw consumer confidence indexes (CCI) falling in most European countries, Romania being among those severely hit – with an all time low index of 54 in Q4 2010 – along with Greece and Croatia. The strongest concerns are related to job prospects, inflation and ability to pay debts, where the Eastern Europeans and Romanians, in particular, are quite pessimistic. Within this context, the same concerns are mentioned regarding the first half of this year. For Romanians, the first and biggest concern is related to job security, followed by debts and the raise of utility bills. It is worth to note that the increase of food prices is not a major fear for us, Romanians being under the European average from this point of view. Maybe surprisingly for their ability to cope with the crisis, the Polish have rated food prices increase in the top of their concerns, after increasing utility bills.
CHEAP GROCERY - NOT THE FIRST OPTION
This could be good news for the grocery industry, as food is perceived as the last option to cut down from. As a result, Europeans and Romanians especially, have delayed or given up first buying new clothes, new technology, new household items, they have cut down on out-of-home entertainment and tried to save on energy, telephone bills and vacations before switching to cheaper grocery brands. Again, maybe as a confirmation of the Romanian people characteristic of enjoying life and food, the average of those mentioning switching to cheaper grocery brands is lower than in the case of the Europeans (41% vs 52%). Instead, Hungarians and Polish have adopted this move to quite a big extent (68%, 59% respectively).
A shy growth to the horizon
If we compare the end of 2010 with the end of 2009 we can see that countries like Turkey, Slovakia or Ireland are already out of the crisis, with FMCG growth rates of over 5%. Most of the European countries have registered rates between 0.2% and 3% last year compared to end 2009, which suggest that the recovery, although present, is very difficult. Romania is not out of the red zone, yet, with a negative growth of over 11% in Q4 2010, compared to Q4 2009. These rates refer to the FMCG industry, not to the general economic trend, and represent a ratio between the evolution of volume and value sales. We still have to see if the end of last year was the worst that could happen. Only Q1 2011 statistics will show if we are still going deep under or we are shyly starting to climb again.
Modern trade is keeping its appeal
The crisis did not affect the consumer attraction towards modern retail, neither in Romania, nor in other countries. Although the store visiting frequency tend to decrease, people continue to spend the biggest part of their grocery budgets in modern trade. It couldn't be otherwise, as long as these formats have lured their clients with promotions and all kind of offers in the past two years. In Romania, modern trade increased its value share in the total universe, from 43% in 2009, to 48% last year, while in some other countries around us, like Poland, Hungary, or Czech, this market share remained stable or slightly increasing, but well over half of the market.
As for the budget we spend on grocery, it didn't decrease dramatically. As mentioned above, people have rather reduced from other categories – like clothes, technology or going out – before considering food reduction. As a consequence, the monthly amount that Romanians spent on food and personal care last year was approximately EUR 170 compared to EUR 173 a year before. We can even mention countries where this amount has maintained, as the Czech Republic (254 Euro vs 252 in 2009), Poland (203 vs 201) or raised as in Slovakia (261 vs 252). The European average monthly amount spent on food and personal care was EUR 329 in 2010, up from 320 a year before.
Source: Nielsen Global Consumer Confidence Q4 2010; Base: 29.000 Internet consumers
AND SO IS SHOPPING
Of course, the attraction towards modern trade goes hand in hand with the likeability of shopping. Although on a slightly decreasing trend, the percentage of Romanians who declare that they like or really like shopping is still high, at 75% ofrespondents at the end of 2010. It seems that we are quite a distinctive category of consumers, as we have the highest percentage of respondents favorable to shopping compared to our neighbors. The Czech retailers should worry a bit, as more than half of respondents perceive shopping as a chore, although not necessarily difficult. Liking shopping doesn’t mean, on the other hand, spending frenzy. On the contrary, shoppers became more aware of prices when going shopping and they are more sensitive to price changes on regular purchased items.
Probably due to in-store price fights, the percentage of those saying that they knew all the prices for the products bought regularly decreased compared to early 2009. On the other hand, there is a rise among those who notice immediately when prices change. While in 2009 the price changes appeared to be noticed by less than half of the shoppers, in 2010 the increase was already noticeable for at least 3 out of 4 respondents.
