Grocery retail back on form

After the negative trends of the past five years the Nielsen Retail Index registered growth in retail volume sales in Hungary this year.

In Q1 2014 volume sales were 1.6 percent higher in the food, household chemical and cosmetics categories than in Q1 2013. In the 2nd quarter sales were 4.2 percent better than in last April-July. In terms of value, sales expanded by 3.5 percent in Q1 2014 and by 6.4 percent in Q2. As a matter of fact, in the 2nd quarter of 2014 the average FMCG volumes sales growth was 1.6 percent in the 21 European countries examined and the growth was the biggest– around 4 percent – in four countries: Turkey, Hungary, Norway and Belgium (in this order). If we take a look at value sales, we can see that Europe’s average growth was 3.8 percent. In Turkey sales growth was at 12.7 percent (prices elevated by 8.8 percent), followed by Hungary, Norway and Belgium at about 6 percent (prices grew by 2.2, 1.8 and 2 percent, respectively). Now back to Hungary: between December 2013 and May 2014 sales amounted to HUF 720 billion in the 90 grocery categories audited by Nielsen. This performance was 5 percent better than in the same period one year before. Volume sales also augmented by 5 percent; for instance mineral water sales were up 8 percent, fruit juice and chocolate sales rose 7 percent each. In the same period grocery volume sales increased the most in the 401-2,500m² channel (by 10 percent). Stores with a floor space above 2,500m² saw their grocery volume sales drop 2 percent; sales in 201-400m² stores soared by 8 percent, in the 51-200m² channel there was a 6-percent rise and sales grew by 3 percent in 50m² and smaller shops. As regards sales growth sustainability it is a positive sign that Hungarian consumers’ confidence has been growing for more than a year now. The rather big sales growth in Q2 2014 was the result of Hungarian consumers’ growing confidence: 15 percent of them think that prices and their personal finances are good enough to buy what they need – this index rose 3 percentage points from Q1. What is more, 22 percent of them are optimistic about the next 12 months in terms of their own financial situation (this index was also up 3 points). In the first half of 2014 market players spent 28 percent more on television ads for groceries than in the first six months of 2013, at rate cared price about HUF 63 billion; HUF 60 billion was spent on commercials for household chemicals and cosmetics