FMCG price pressure still present

During the first quarter of 2016, European FMCG (fast-moving consumer goods) experienced their slowest price growth in 6 years’ time according to Nielsen’s report.

Lower production costs

In the first quarter, FMCG’s prices only grew 0.7 %, the smallest growth since 2010’s first quarter (+ 0.5 %), while volumes sold grew 0.8 %. Retailers’ turnover therefore grew 1.5 %, which is the lowest growth in the past 3 years (only 1.2 % in 2013’s second quarter).

Several price cuts in 2 of Europe’s 5 largest markets, namely Germany and Italy, were to blame for the weaker results, according to European director retail insights Jean-Jacques Vandenheede. He also points out the increased price competition between retailers and the lower production costs thanks to lower energy pricing.

Belgian FMCG prices grew 3.4 % in the past quarter, which is the largest growth in the past 4 years. Volumes sold dropped 1.7 % however, which means turnover growth reached 1.7 %. In the Netherlands, FMCG prices grew 1.3 %, volumes dropped 0.6 % and turnover growth reached 0.7 %.

Turkey managed the largest growth (+ 9.7 %), followed by Poland (+ 4.8 %) and Hungary (+ 4.6 %). On the other end of the scale, we have Greece (- 6.1 %), Finland (- 2.8 %) and Germany (- 0.4 %). Widely varying numbers for each country show that there is no actual pan-European trend. “What FMCG are concerned, Europe does not act like a unified market.”