European retail sales expected to grow by 2.1 percent in 2018

According to a forecast by GfK, retail sales will increase by 2.1 percent in the 28 member states of the European Union this year. GfK’s ‘European Retail in 2018’ study reveals that all countries were able to profit from the economic growth that 2017 brought – told Dr Johannes Schamel, study lead and retail expert of GfK. The company reckons that further sales growth can be expected in European offline retail in 2018, although in certain countries sales expansion and price increase might cancel each other out. The main conclusions of the study:

Purchasing power: in 2017 each citizen of the EU-28 countries had EUR 16,436 to spend, this means a nominal 1.9 percent increase from the level of the previous year. Among the EU countries, only Great Britain (-1.5 percent) underwent a purchasing power decline, which is partly a result of the devaluation of the British pound.

Retail turnover prognosis for 2018: The past year’s growth in demand was able to compensate for offline retail’s market share losses to online trade. GfK consequently expects a nominal turnover growth of 2.1 percent in the 28 EU countries for 2018. Sales growth is forecasted to reach a robust 6 percent in Hungary.

Price trends: With an inflation rate of 1.7 percent in 2017, the EU-28 nations once again neared the European Central Bank’s proclaimed 2 percent target for consumer prices.

Sales area: In 2017 there was an increase in the absolute retail space in the European countries under review, with the exception of the Netherlands (-0.4 percent). However, per-capita sales area remained constant or even declined in half of the studied countries.

Sales area productivity: As in the case of per-capita sales provision, sales area productivity varies across Europe. In Hungary, restrictive planning regulations along with protectionist tendencies slowed the expansion of international retailers. As a result, there was limited development of new large-scale retail spaces. However, strong growth in retail turnover fuelled sales area productivity, which grew by 6.9 percent to EUR 2,997/m² over the past year. //