Satisfied Austrians, in high concentration

According to data from the Austrian subsidiary of Nielsen, food sales showed growth of 3.4 per cent last year, compared to 2006. As the inflation rate was only 2.2 per cent, this means that consumption was up last year. This trend is to continue this year. In spite of a good start for 2007, growth slowed down in the third quarter, leading to some anxiety. However, sales recovered in the last quarter, mainly as a result of an increase in prices. It is notable that the two hard discount chains continued to improve their market position, achieving combined growth estimated at 5.5 per cent. Overall consumption increased in Austria in 2007. Martin Prantl, director of Nielsen in Austria pointed out that the high rate of expansion seen at the end of 2007 was primarily due to significantly higher prices. Hofer and Lidl held a combined market share of 22.8 per cent in 2007, which was 0.4 per cent up compared to 2006. However, the rate of their expansion has slowed down considerably compared to earlier years, as fewer new units were opened. Classic distribution channels produced growth of 2.9 per cent in 2007. The Rewe and Spar groups were the most successful ones last year, holding a respective market share of 29.7 and 27.6 per cent. Total revenues of the Austrian Spar group amounted to EUR 9.89 billion, which is 11.1 per cent higher than it had been in 2005. Population is expected to increase by half a million till 2020, which is also expected to boost consumption. While conventional advertising still has a major influence on the consumer decisions of Austrians in food categories, word of mouth propaganda only has limited influence, according to Nielsen data. Among cosmetics, brand awareness is the most important single factor influencing consumer decisions, while conventional advertising comes second. In Austrian baskets, dairy products account for 24 per cent of the total amount spent, with alcohol-free drinks in second place with 15 per cent. Many Austrians welcome promotional campaigns, where washing powder, coffee and toilet paper are the most popular products.