GfK: purchasing power growing in Europe
In a study about the purchasing power of customers in the retail sector, market researcher GfK has found that the momentum of previous years has continued. Among EU countries, only Great Britain has undergone a purchasing power decline (-1.5%), partly as a result of the devaluation of the British pound.
Thanks to continuing income increases, the top-ranking East European countries of previous years once again lead the pack in 2018, GfK reports. The researcher expects robust growth rates for Bulgaria (+5.3%), Hungary (+6.0%), the Czech Republic (+6.5%), and Romania (+7.5%). Poland should also be able to achieve stationary retail growth of +5.6%, even though retail opening hours on Sundays were reduced from four to two times a month.
In Hungary, restrictive planning regulations along with protectionist tendencies have slowed the expansion of international retailers. As a result, there has been limited development of new large-scale retail spaces. Strong growth in retail turnover therefore fueled sales area productivity, which grew by +6.9% over the past year, GfK says.
The study has a separate chapter on Hungary, focusing on the effects of regulatory restrictions on Sunday opening introduced in 2o15, which posed major challenges to Hungary’s retail scene during the transformation phase. Staffing had to be adjusted to the changes in weekday visitation patterns, and the stocking of fresh goods had to be completely replanned.
The original goals of the regulation – the improvement of employee working conditions and promotion of owner-run, small-scale retail – were not accomplished. Retailers responded by reducing staff, which in combination with the more compressed opening hours led to higher workloads on business days, GfK notes.
Owner-run retail outlets were able to benefit only in the sale of urgently needed items, particularly fresh goods. During the period of the Sunday restrictions, which lasted only for a little over a year from March 2015 to April 2016, consumers continued to shop for basic FMCG needs on other days of the week at chain retailers. The regulation was thus unable to halt the advance of chain retailers and particularly discount merchants, which was ultimately to the detriment of owner-run retail outlets, GfK concludes.
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