European grocery prices rise at slowest pace for six years
New research has shown that the price of grocery items rose at its slowest pace across Europe in six years in the first quarter of 2016.
Retail performance data from Nielsen shows that prices paid for fast-moving consumer goods in the period increased by just 0.7%, the smallest increase since the first quarter of 2010. Meanwhile, volumes edged up 0.8% year-on-year. As a result, grocery retailers saw a 1.5% increase in takings at the till – the lowest figure for nearly three years.
“Europe was dragged down this quarter by significant falls in prices being paid in two of the big five markets – Germany and Italy,” said Nielsen’s European director of retail insights Jean-Jacques Vandenheede. “Lower prices are being driven by fierce price competition among the retailers and falling production costs, mainly due to lower energy prices.”
Across the 21 European countries measured, Turkey had the highest growth in takings at the tills with a rise of 9.7%, followed by Poland, up 4.8%, and Hungary, up 4.6%. At the other end of the scale, the biggest declines were in Greece and Finland where takings fell by 6.1% and 2.8% respectively.
Of the big five western European markets, Spain had the highest growth at 3.1%, followed by France at 2.2%. Germany was the only one of the big five to experience a year-on-year decline in takings at the tills at -0.4% and one of only four countries in the whole study to decline.
The UK moved into positive territory with takings rising by 0.5% in the quarter. This was the first growth in nearly two years. However, the growth figure was still the sixth lowest among all 21 countries.
Vandenheede added: “The picture across Europe is one of disparity, almost chaos. There is no consistency in performance between countries and no one big trend. As far as the FMCG sector is concerned, Europe is not behaving like a unified market.”
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