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European grocery market experiences stalled growth

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Grocery prices across Europe are rising at their slowest pace in five years.

Recent data from Nielsen reveals that fierce competition in the European grocery market has led to a significant decrease in the rate of price inflation. 

Sales volumes of fast-moving-consumer-goods rose by 0.8% in the fourth quarter of 2015; the seventh consecutive quarter of growth for the category. However, sales values rose just 1.3%, the lowest increase in over five years. This resulted in a 2.1% increase in average profits for European retailers.

“Sales values are being kept in check by a combination of things,” said Jean-Jacques Vandenheede, European Director of Retail Insights at Nielsen. 

“Production costs are falling thanks to lower oil prices, and retailers are still employing heavy promotional activity to combat the increased popularity of the discounters. Furthermore, almost three in ten Europeans are switching to cheaper grocery brands to save money.”

According to Nielsen, the UK was one of only four countries that suffered a decline in sales. Of the largest five Western European markets, the biggest winner was Spain, which enjoyed nominal growth of 2.7%.

Published on Thursday 18 February by Philip Gallagher

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