1 NEUSICHT CONSUMER SPENDINGS AND SHOPPER TRENDS IN CEE 7. GROW EAST CONGRESS - 17 TH MARCH 2016 Tobias Schediwy, GfK
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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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
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
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
© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy
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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
© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy
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
© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy
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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
© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy
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.. and more promotions do not lead to market share growthExample Czech Republic
© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy
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
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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
© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy
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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
© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy
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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
© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy
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 %)
© GfK 2016 | Grow East Congress |16-17 March, 2016 |CConsumer Spendings and Shopper Trends in CEE | Tobias Schediwy
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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