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ePaper created 2015-05-08, 10:57:20 | version 1.38.0
16 ANNUAL REPORT 2014Deutsche EuroShop SHOPPING Consumer spending in 2015 – is Europe on a growth trajectory? 2 014 got off to an extremely positive start. The Euro- pean economy picked up considerably. Consum- ers became increasingly optimistic. Economic and income expectations reached record highs nearly every- where between April and June. Con- sumer confidence returned, partic- ularly in the crisis-struck countries of Italy, Greece, Spain and Portugal. It forecasts a real-term increase in private consumer spending in Eu- rope of between 1.0% and 1.5%. Pri- vate consumer spending in Germany will rise in real terms by 1.5% accord- ing to GfK calculations. Retail to benefit little from good consumer sentiment However, only some retail busi- nesses are likely to benefit from this good consumer sentiment. Food re- tailers are only expected to grow by 0.5%. There are two reasons for this: First, the quantity of food purchased has been declining for years, due in part to demographic trends but also the fact that consumers have adopt- ed a more deliberate shopping style. Second, prices will continue to re- main very stable in 2015, which means that growth as a result of ris- ing food costs is unlikely. The situation looks a little brighter in the non-food segment. The market is expected to grow by 1.3% this year, up slightly on last year. Performance in the textile seg- ment is likely to improve after un- seasonable weather caused the mar- ket to collapse during the last third of 2014, the result of which was that growth at the end of the year was negative at -2%. The electron- ics segment, on the other hand, had a good year in 2014 and will find it hard to beat last year’s good sales fig- ures, generated partly in connection with the World Cup. C Germany was considered the eco- nomic dynamo of Europe. The Brit- ish enjoyed an economic upswing, the likes of which had not been seen for quite some time, and even con- sumers in Eastern Europe anticipated strong growth rates during the year. Summer and autumn, however, brought renewed uncertainty, prompted by the war in Ukraine, Putin’s comments concerning coun- tries in Eastern Europe and the con- flicts in the Middle East. Economic conditions also de- teriorated. The growth in gross do- mestic product in many countries was not nearly as substantial as fore- cast and some economies even found themselves on the brink of a reces- sion. A few countries, mainly those in Southern Europe such as Spain, struggled with deflation. Even for the European Union as a whole, there was – and still is – the threat of a sus- tained negative price trend. Consumer sentiment plum- meted drastically, especially in the large economies and Eastern Europe. Economic expectations in Germany slumped more than ever before. By the end of the year, however, opti- mism had regained its foothold. In December in particular, it became evident that the economy had recov- ered over the course of the previous few months and that Europe was no longer at risk of entering a new re- cession. In fact, most European coun- tries reported a substantial increase in gross domestic product for the third quarter. The impact on eco- nomic expectations was correspond- ingly positive. Consumers expected the next few months to bring further improvements in the economic situ- ation and both income expectations and consumers’ willingness to spend picked up again. The GfK Consumer Confidence Index for the EU-28 was at 5.5 points at year’s end, with the trend again pointing upward and the GfK Con- sumer Confidence Index reached 9.3 points in February, its highest level in Germany in 13 years. At 57.4 points, consumers’ willingness to spend reached an eight-year-high in January. If current conditions remain stable, the economy of Europe as a whole will experience substantial, renewed growth, which will also further boost the living conditions of consumers in many countries. Last year the labour market experienced its first turnaround since the start of the financial and economic crisis, with an increase in the number of people finding jobs. This trend will continue during the current year. In light of that, GfK expects pri- vate consumption to significantly underpin the economy, both in Ger- many as well as in Europe as a whole. GfK forecasts suggest that private household spending in Germany is set to increase by 1.5% in real terms in 2015. It expects an increase of between 1.0% and 1.5% for the European Union as a whole. This means that private con- sumption in Germany is likely to grow just as vigorously as its gross domestic product. Retail businesses will benefit little from this increase in consumer spending. Rolf Bürkl, Senior Research Consultant, Financial Services, GfK by Rolf Bürkl » The trend is pointing up again. At 9.3 points, German GfK consumer sentiment for February reached its highest level in 13 years. Numbers 9.3 points The GfK Consumer Confidence Index for Germany reached its highest level in Germany in 13 years. 57.4 points The propensity to buy in Germany reached an eight-year high at the start of 2015 0.5% Anticipated growth for food and drink retailers. Reasons: demo- graphic changes and consumers adopting a more deliberate shop- ping style. 1.3% 2015 is expected to be a better year for the non-food retail sector. 2014 saw periods of unfavourable weather that impacted on the textile sector in particular. 20112009 20122010 2013 2014 2015 Source: GfK | European Commission Consumer climate in Germany 2011200920122010201320142015