GROWTH REPORTER EUROPE QUARTER 4, 2016

Transcription

1 GROWTH REPORTER EUROPE QUARTER 4, 2016 Feb 2016

2 INTRODUCTION This report: Compares overall market dynamics (value and unit growth) in the Fast Moving Consumer Goods sector across Europe. Is based on the sales tracking Nielsen performs in every European market. Covers sales in grocery, hypermarket, supermarket, discount and convenience channels Is based on the widest possible basket of product categories that are continuously tracked by Nielsen in each of these countries and channels Reports on the 4th Quarter and FY of 2016 Week 40, 2016 till week 52, 2016 Growth Reporter [Insert Q4 2016] 2

3 EUROPE CONTINUES TO BE A LOW GROWTH MARKET BUT MOMENTUM IMPROVED IN Q4 Context Economic Growth in Europe is stable at +1.3% (source: IMF). Consumer Confidence has fallen in 2016 in some large countries due to the uncertain political landscape (Source: Nielsen). Trend Industry growths were lower in 2016 and the Volume Growth of +0.4% was the lowest since However there was stronger Nominal Growth and improving Volume Growth in Europe in the second half of 2016, which was driven by Central European countries and IBERIA. Within Western Europe, there has been little momentum in volume sales and in 2016 there has been low basket inflation (Unit Value Growth) in Germany, France and Italy and deflation UK. Discounter growth in Western Europe is +3% and remains ahead of Supermarket and Hypermarket growth (Source: Nielsen Strategic Planner.) 3

4 REGIONAL SUMMARY EUROPE (Weighted average) Volume change Unit value change Nominal Value Growth 3,8% 3,6% 3,1% 3,0% 2,2% 2,6% 2,4% 1,6% 2,4% 1,3% 2,0% 2,1% 1,8% 1,8% 1,5% 1,3% 1,3% 0,9% 2,3% 0,7% 1,1% 1,9% 1,0% 1,6% 1,5% 0,8% 1,3% 0,8% 1,1% 0,7% 0,7% 0,8% 0,7% 0,8% 0,4% 0,3% 0,8% 0,1% 0,3% -0,6% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 (*):Austria, Belgium, Czech Rep., Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, Turkey, UK. 4

5 DEVELOPMENT INDEX TOTAL EUROPE Base 100 = Value Volume 5

6 DEVELOPMENT INDEX BY COUNTRY VALUE INDEX 2016 (base 100 = 2006) VOLUME INDEX 2016 (base 100 = 2006) Turkey Poland Norway Hungary Sweden Slovakia Spain Netherlands Czech Rep. UK Belgium Austria France Portugal Germany Denmark Finland Ireland Italy Switzerland Greece Turkey Poland Norway Spain Slovakia Portugal Czech Rep. Switzerland Sweden Italy France Belgium Austria Netherlands UK Ireland Germany Finland Denmark Hungary Greece

7 FY 2016 GROWTH RATES PER COUNTRY (VERSUS FY 2015) Volume growth Unit value Nominal Value Growth 9,1% 6,4% 3,1% -2,0% -0,3% 0,0% 0,4% 0,3% -0,1% 0,4% -0,8% 0,0% 0,4% 3,1% 2,6% 3,4% 1,8% 1,4% 2,3% 2,4% 2,5% 2,6% 2,6% 2,8% 2,8% 1,5% 0,8% 0,9% 3,9% 2,6% 0,8% 0,9% 1,1% 1,3% 1,6% 0,1% -0,5% 0,4% 1,8% 0,9% 0,8% -1,1% -0,6% -1,5% -0,7% -0,1% -0,7% 3,6% 2,4% 0,3% 3,1% 2,8% 2,7% -9,8% -6,7% -2,1% -4,1% -0,3% 7

8 Q GROWTH RATES PER COUNTRY (VERSUS Q4 2015) Volume growth Unit value Nominal Value Growth 8,8% 4,7% 0,3% 0,2% 1,5% 1,5% 1,6% 2,1% 1,5% 0,4% 0,4% 1,9% 0,6% 0,7% 0,8% 1,3% 1,4% 0,2% 0,3% 0,7% 0,0% 0,6% -3,0% -2,6% - -1,1% -0,3% -0,5% -0,4% -0,5% -0,3% -2,9% -3,5% 2,0% 2,1% 0,6% 1,5% 2,1% -0,1% 3,3% 0,4% 2,9% 3,4% 3,6% 1,3% 3,9% 2,2% -0,3% 4,0% 0,6% 0,6% 4,2% 3,4% 3,6% 4,5% 4,1% 0,4% 4,7% 2,4% 2,3% 4,1% 8

9 Q GROWTH RATES PER COUNTRY (VERSUS Q4 2015) Nominal Growth Finland Norway Sweden Russia Estonia Latvia Denmark Lithuania Belarus Ireland Great Britain Netherlands Germany Poland Ukraine Belgium Czech Republic Slovakia Moldova France Switzerland Austria Slovenia Hungary Romania Portugal Spain Italy Growth Rate above Europe Average Croatia Growth Rate between Zero and Europe Average Growth Rate below Zero Serbia Albania Montenegro Bosnia- Herzegovina Macedonia Greece Bulgaria Turkey 9

10 Q GROWTH RATES PER COUNTRY (VERSUS Q4 2015) Unit Value Growth Finland Norway Sweden Russia Estonia Latvia Denmark Lithuania Ireland Great Britain Netherlands Germany Poland Belarus Ukraine Belgium Czech Republic Slovakia Moldova France Switzerland Austria Slovenia Hungary Romania Portugal Spain Italy Growth Rate above Europe Average Croatia Growth Rate between Zero and Europe Average Growth Rate below Zero Serbia Albania Montenegro Bosnia- Herzegovina Macedonia Greece Bulgaria Turkey 10

11 Q GROWTH RATES PER COUNTRY (VERSUS Q4 2015) Volume Growth Finland Norway Sweden Estonia Russia Latvia Denmark Lithuania Ireland Great Britain France Netherlands Belgium Switzerland Germany Czech Republic Austria Slovenia Poland Slovakia Hungary Belarus Romania Moldova Ukraine Portugal Spain Italy Growth Rate above Europe Average Croatia Growth Rate between Zero and Europe Average Growth Rate below Zero Serbia Albania Montenegro Bosnia- Herzegovina Macedonia Greece Bulgaria Turkey 11

12 GROWTH DRIVERS & BLOCKERS PER COUNTRY(VERSUS 2015) Meals Fresh Sparkling Wine Beer Min Water Gin Meals Fresh C. Soft Drinks Beer Min Water Milk Laundry Det Meat Perish Cereals Baby Diapers Bread Cheese Fresh Fruit Juice Amb Whisky Chilled Desserts Margarine Bread Min Water Beer Charcuterie Meat Perish Baby Milk Fruit Juice Amb Milk Fresh Coffee Fish Frozen Great Britain Netherlands Belgium Norway Germany Meat Perish Beer Bread C. Soft Drinks Drink Yogurt Poland Charcuterie Milk Fresh Chocolate Cream Fresh Min Water Min Water Beer Smoked Fish Energy Drinks Seeds & Nuts Coffee Milk Cheese Fresh Charcuterie Cream Fresh Meals Fresh Meat Perish Beer Chocolate Smoked Fish Min Water Coffee Cheese Fresh Seeds & Nuts Yogurt C. Soft Drinks Sugar Saint Protect Chilled Desserts Aniseed Spirits Meat Perish Milk Bread Drink Yogurt Sugar Growth Rate above Europe Average Portugal Growth Rate between Zero and Europe Average Growth Rate below Zero Spain France Charcuterie Oils Edible Beer Chocolate Meals Fresh Italy Milk Drink Yogurt Choco Drinks Sausages Fresh C. Soft Drinks Austria Chocolate Beer Fruit Juice Fresh Crisps & Chips Seeds & Nuts Charcuterie Chocolate Meals Fresh Savoury Biscuit Seeds & Nuts Yogurt Fruit Juice Amb Sugar Min Water Ice Cream Oils Edible Milk C. Soft Drinks Sausages Fresh Tea Soft DR **Source: nielsen Strategic Planner 12

13 DETAILS BY COUNTRY

14 MAJOR COUNTRIES

15 FRANCE Highlights Context French consumers remain pretty pessimistic - having in mind the terrorist threat, the high level of unemployment and the uncertainty of the presidential election. Amongst shoppers, families, modest and young households tend to limit their FMCG consumption, eg preferring to empty their closet instead of purchasing more beauty or food items. The French market remains impacted by the price war (deflation on national brands) and promotional focus, enabling shoppers to find very good deals and savings. At the same time, consumers confirm their taste for innovations and quality products - making a kind of good balance between cheap, value offers on one hand, and premium items on the other one. Organic food and small brands are the best examples of this upgrading trend, with sales growing by 18% and 5%, respectively. In terms of channels, e-commerce (click&drive) and convenience stores keep growing their number of stores and developing solutions for French shoppers, who tend to buy more often (in different channels) a smaller amount of items. Trend Nominal sales remained at a low level in Q4, with weak growth in volume - not enough after the drop in Q3. As a result, 2016 has in France the less dynamic trend for years, despite the long-term premiumization of the market. 15

16 FRANCE 2,4% 0,6% 2,2% 0,2% 2,2% 1,9% 0,2% 1,6% 1,5% 1,4% 1,3% 0,2% 1,0% 1,0% 1,1% 2,0% 0,9% 1,8% 0,3% 1,1% 0,8% 1,3% 0,7% 1,1% 0,6% 0,0% 0,6% 0,4% 0,8% 0,5% 0,8% 0,6% 0,6% 0,7% 0,8% 0,2% 0,9% 0,4% 0,4% 0,1% 0,3% -0,2% -0,7% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Click & Drive channel included from 2013 data (2014 trends) Convenience Stores included from 2014 data (2015 trends); 16

17 GERMANY Highlights Context The German economy continues to develop positively. The expected economic growth for 2016 is +1.9%. Apart from higher residential investments, 80% of the growth is accounted for by the expansion of public and private consumption expenditure. The FMCG market can not quite take the positive momentum of the third quarter at the end of 2016 and is only + 0.3% higher than in the fourth quarter. Although there was a sharp price increase, the volume sold remained below the previous year's level. In particular the weaker sales development of the hypermarkets over m2 and the supermarkets up to m2 curb the market - and this, although in the hypermarkets the promotion pressure has been increased. That is to say, a larger proportion of sales were generated through promotions than in the previous year. An average price increase of 28% makes dairy products the strongest growth category. Trend In 2017 the upturn is likely to continue. Four working days less lead to a weakened increase in GDP to an estimated growth of + 1.3%. Without this special effect, experts estimate, the German economy will expand at almost the same rate as in

18 GERMANY 3,5% 1,5% 2,8% 0,4% 2,5% 1,5% 1,6% -0,1% 2,1% 1,3% 0,8% 0,4% -0,8% 3,0% 0,6% 2,0% 1,0% 0,2% -0,8% 1,3% 0,9% 0,4% 2,4% 1,5% -0,2% 1,4% 1,1% 1,5% -0,2% 0,9% 0,3% -0,6% -0,3% -1,5% 0,8% 1,1% -0,3% 1,5% 0,3% - -2,4% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

19 ITALY Highlights Context In the last quarter Nominal sales growth has been positive, supported by the growth in volumes, however the results has been affected by the still negative Prices evolution. Prices decrease, are partially driven by the deflation that has still characterized our economy, but also by consumers tendency to basket downgrade. Consumers are still undertaken strategies to saves on Grocery. The recourse to promotions (which intensity is almost stable vs YA) and the increasing tendency of switching on MDD or follower brand, are strategies saving volumes but affecting retailer values mix Trend Q4: Nominal Sales growth (1.63%) and Volume growth (2.09%) so Unit change ( inflation) YE: Nominal Sales growth (0.84%) and Volume growth (1.46%) so Unit change ( inflation) -0.61% 19

20 ITALY 0,5% 1,5% 0,8% 1,5% 1,0% 0,2% -0,5% -0,6% -0,2% -0,7% -2,5% -2,3% 2,0% 1,9% 1,8% 1,1% 1,4% 0,3% 1,8% 1,9% -0,1% 1,1% 0,9% 0,6% 0,4% 0,4% 0,0% -0,3% 0,1% -0,2% -0,6% -0,9% -0,6% - -0,2% - 1,6% 2,1% 2,1% 1,4% 0,3% -0,5% -0,9% -1,0% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

21 UK Highlights Context Despite economic and political uncertainty around 'Brexit, shopper sentiment was unaffected in Q4 as real incomes continued to rise in 2016 and unemployment is at the lowest level in a decade (4.8%). The Supermarket price war continued during the year with the savings passed onto shoppers, which helped to maintain overall demand in FMCG Promotional spend continues to fall and hit 27% of sales in December 2016 with most retailers (and many brands) reducing their reliance on multi buy in favour of simpler and more transparent price cuts. With improving growth for premium private label, food to go and treats and indulgences, Christmas 2016 was the best Christmas for retailers since Shopper`s continue to move towards shopping `little and often 'and the average spend per visit is still falling. However, large stores ( >2,500 sq m selling) still account for 50% of sales and Convenience stores (< 300 sq m selling) 25% of sales. Trend Nominal Sales growth improved in Q4 to +0.7% ; the first positive quarter of growth in almost 3 years. Volume growth of -0.3% during 2016 also improved, to 0% during Q4. Deflation continued for a 3rd year running but the underlying trend is for the industry to return to inflationary growth in the first 6 months of

22 UK 1,3% 0,0% -0,3% -0,3% -0,3% -0,6% -0,5% -0,2% -1,9% 2,2% 2,3% -1,1% -1,6% -3,8% 0,7% -2,5% -1,8% 0,2% 0,5% -0,5% -0,3% -0,2% -0,7% 0,2% 0,1% -0,4% -0,5% -0,3% -0,6% -0,4% -0,5% -0,8% 0,5% 0,1% 0,4% -1,1% -0,5% -1,6% -0,5% -0,2% -0,7% 0,7% 0,7% 0,0% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

23 SPAIN Highlights Context GDP continues growing above 3 %, tourism is beating records once and again and internal consumption is also positive. Unemployment continues being Spanish major social and economic concern, although unemployment rate has decreased significantly in the last 3 years. Consumer Confidence Index rose also in Q4, to reach pre-crisis levels. FMCG market in Spain continues showing a very positive performance, supported by a solid volume increase. Q4 results are a consequence of a quite good Christmas campaign. Prices in FMCG are stable, although the situation may change in the short term due to petrol prices increase Trend In Q2 Nominal Sales growth remained same in Q4 to +3.6% - the highest of Q4 in last 3 years and Sales in volume are increasing +3.9% and price level starts to be negative after several quarters. On FY 2016, FMCG have increased +3.1%, which is the highest increase in the last 4 years. 23

24 SPAIN 0,1% 3,6% 3,6% 3,1% 0,3% 3,0% 3,1% 2,7% 0,8% 2,4% 0,9% 2,0% 1,4% 2,1% 3,9% 1,8% 3,5% 2,8% 0,6% 0,9% 0,4% 1,6% 2,1% 0,9% 1,9% 2,2% 1,4% 0,7% 0,7% 1,3% 0,9% 1,0% 0,7% 1,1% 0,3% 0,2% -0,1% -0,3% -0,7% -0,6% -1,1% -1,4% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

25 PORTUGAL Highlights Context The favourable climate of the summer and the Football European Championship, helped an acceleration of consumption in 2nd half of year 2016 Since Q2 2016, price trend starts to be positive after several quarters of deflation. Despite the fact there is still a very high promotional activity in Portugal (44% of FMCG sales), Portuguese consumer is now much more confident than in the past, and more willing to buy premium categories and products. Christmas season was very dynamic for FMCG sales. Trend Nominal Sales have increased by 4% in Q4. Sales in volume are increasing 3.4% with a positive price effect of 0.6pp On total year 2016, FMCG have increased 2.5%, which is the highest increase in the last 8 years. 25

26 PORTUGAL 2,5% 2,5% 3,2% 0,5% 4,0% 0,6% 3,6% 1,8% 3,4% 1,4% 3,1% 2,6% 1,3% 2,7% 2,3% 1,8% 0,9% 1,1% 0,5% 0,2% 0,5% 0,3% -0,1% 0,0% -0,1% -0,5% -0,4% -0,3% -0,6% -1,0% -1,0% -0,9% -1,5% -1,4% -1,3% -1,8% -0,6% -1,1% -0,4% -1,8% -0,9% -2,4% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

27 NETHERLANDS Highlights Context Volume growth is limited in recent years in the Netherlands. An explanation for this is the recovery of Horeca after the economic crisis. In addition, Supermarkets no longer seem to take advantage of the decline of specialty stores. After many years of decline, specialty stores are stabilizing. Another factor is the growth of online and discount formulas like Action, who sell general merchandise but also several grocery categories. Price levels are increasing in almost all Supergroups, with the exception of Homecare and Personal care. Trend Nominal Sales growth in 2016 of +1.3% is slightly higher than in 2015, but this is still significantly lower than the trend in the years "Price" has more impact on growth with +1.8%, which is higher than the level in 2015 (1.2%) 27

28 NETHERLANDS 1,5% 1,4% 1,4% 1,3% 2,1% 2,0% 1,8% 1,8% 1,9% 2,0% 1,0% 1,9% 0,9% 0,9% 1,5% 1,1% 0,6% 0,7% 0,7% 0,6% 1,3% 0,9% 0,8% 0,9% 0,2% 0,0% -0,1% 0,0% -0,2% -0,5% -0,5% -0,6% -0,6% -1,0% -0,3% -0,9% -0,4% -1,0% -1,3% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

29 OTHER COUNTRIES

30 AUSTRIA 5,9% 1,9% 3,7% 2,0% 3,3% 3,4% 3,0% 1,3% 2,5% 2,7% 2,6% 2,4% 1,6% 2,0% 3,9% 1,6% 2,3% 2,7% 2,5% 2,2% 2,3% 0,8% 1,8% 1,4% 1,4% 1,3% 0,9% 0,9% 0,6% 0,4% 0,4% -1,1% -0,2% -0,3% -0,2% -0,9% -0,5% -0,7% -2,3% -1,0% -3,5% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 ** Only Grocery retail from Q1 14-Q4 15, for all other periods Grocery and Drug retail 30

31 BELGIUM 5,7% 2,0% 2,7% 2,4% 2,6% 1,0% 3,7% 0,3% 1,5% 3,4% 2,9% 1,5% 1,1% 1,5% 2,3% 2,3% 1,4% 0,8% 1,4% 0,6% 0,4% 0,2% 0,4% 0,3% 0,0% -0,2% -0,1% 0,2% 0,0% -0,6% -0,8% -0,8% -1,1% -1,6% - -2,9% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

32 CZECH REPUBLIC 4,4% 0,2% 3,5% 4,2% 0,6% 2,7% 2,9% 0,4% 2,1% 2,4% 2,5% 3,1% 3,4% 3,2% 2,9% 1,4% 2,4% 2,6% 2,5% 1,3% 2,4% 0,7% 3,3% 0,6% 0,8% 1,8% 3,0% 1,5% 3,0% 2,2% 3,6% -0,2% -0,2% -0,2% -0,7% -0,9% - -0,7% -1,5% -1,3% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

33 DENMARK 1,8% 0,2% 1,5% 0,3% 1,3% 0,4% 0,2% 0,0% 1,0% 0,1% 0,8% 0,9% 0,1% 1,5% 1,0% 1,0% 0,9% 0,5% 0,7% 0,4% 0,7% 0,6% 1,0% 0,3% 0,6% 0,4% 0,2% 0,3% 0,0% 0,1% 0,1% 0,0% -0,1% -0,2% 0,0% -0,2% -0,4% -0,4% -0,4% -0,7% -0,4% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

34 FINLAND 2,8% 0,8% 0,5% 0,2% -2,0% -2,0% -2,1% -1,5% -2,2% -2,0% -2,1% -4,1% 1,9% 0,8% 0,2% -1,3% -1,1% -5,0% -3,1% - -0,4% -1,6% -3,0% -2,2% -2,2% 2,6% 0,2% -0,5% - -2,4% -1,6% -0,7% -1,0% -2,7% -1,9% -3,0% -3,4% -2,6% -3,0% -0,5% -3,5% -4,6% -2,5% -6,0% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 FMCG excluding tobacco & magazines 34

35 GREECE Unit value change Volume change Nominal growth -0,7% -0,7% -1,4% 0,1% -0,9% -0,8% 3,1% -9,8% -6,7% 0,7% -0,5% -0,7% 0,0% 0,4% -0,6% -0,2% -0,7% -0,8% - -3,1% -3,9% 2,5% 1,0% - -1,5% -0,5% -2,2% 3,4% 5,4% 4,5% 0,9% 0,8% -2,3% -1,4% -2,6% -12,2% -15,3% -6,8% 2,5% -8,7% -6,2% -0,3% -2,6% -2,9% -10,7% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

36 HUNGARY 8,3% 7,9% 6,7% 1,8% 6,4% 2,6% 5,8% 2,2% 5,1% 4,9% 5,0% 4,4% 4,9% 4,5% 1,9% 2,8% 4,1% 3,5% 6,6% 6,1% 2,8% 1,9% 3,2% 2,7% 2,4% 4,1% 4,1% 3,9% 4,2% 3,4% 3,2% 1,6% 3,3% 2,5% 2,2% 1,6% 0,4% -1,1% -1,6% -0,6% -2,5% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

37 IRELAND 4,0% 2,6% 0,3% 2,3% 0,0% 2,4% 4,6% 2,2% 2,0% 0,9% 1,3% 2,1% 0,6% 0,6% 1,1% 1,5% 2,3% 2,4% 0,6% 1,0% 1,8% 1,4% 0,9% 1,5% 1,1% 0,7% 1,1% 0,5% 0,8% 0,4% 0,2% 0,3% 1,3% 0,3% -0,6% -1,4% -0,6% -0,5% -2,3% - -4,0% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

38 NORWAY 6,0% 1,8% 4,3% 4,3% 3,9% 1,5% 3,6% 3,5% 3,0% 3,0% 3,1% 2,1% 1,3% 2,6% 0,5% 4,2% 3,2% 2,8% 2,6% 2,5% 1,8% 0,9% -0,1% 3,5% 3,3% 0,8% 2,3% 2,1% 2,1% 2,2% 2,0% 2,0% 1,0% 2,5% 2,0% 2,1% 1,3% 1,4% 1,4% 0,0% -0,1% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

39 POLAND 3,6% 3,6% 1,4% 2,4% 2,7% 2,4% 2,2% 1,0% 0,3% -0,2% -1,0% -2,7% 0,2% 3,2% 2,6% 3,1% 2,7% 1,5% 0,1% 1,4% 0,0% -0,1% -0,1% -0,5% - 4,8% 4,7% 0,5% 4,0% 2,4% 2,9% 4,5% 4,4% 2,3% 1,5% 2,3% 0,9% 1,8% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

40 SLOVAKIA 4,5% 0,8% 4,1% 0,3% 3,5% 3,5% 3,2% 3,3% 3,3% 0,4% 0,2% 2,7% 2,8% 0,5% 2,3% 4,1% 4,3% 3,7% 3,4% 1,8% 3,6% 3,8% 3,3% 1,4% 2,9% 2,5% 1,1% 0,3% 1,0% 1,0% 0,3% 1,1% 0,7% 0,7% 0,2% 0,4% 0,2% -0,1% -0,1% -0,2% -0,7% -0,8% -0,8% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

41 SWEDEN 4,9% 4,2% 3,9% 3,8% 2,6% 0,2% 3,3% 1,8% 3,2% 2,5% 2,6% 2,7% 2,5% 2,8% 0,6% 2,3% 1,9% 1,8% 0,8% 3,1% 1,6% 1,4% 2,6% 2,4% 0,6% 0,2% 1,5% 2,3% 1,9% 0,8% 1,9% 1,4% 1,4% 1,1% 0,8% 1,0% 2,0% 1,3% 1,0% 0,6% 0,4% 0,1% -0,2% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

42 SWITZERLAND 2,7% 1,5% 0,3% 1,0% 0,5% 1,1% 1,4% 0,9% 0,7% 0,4% 0,8% 0,3% 0,4% 0,4% 0,5% 0,3% 0,1% 0,1% 0,1% -0,1% -0,3% -0,3% -0,3% 0,3% -0,4% -0,7% -0,7% -0,4% -1,3% -1,3% -1,5% - -0,7% -1,6% -0,9% -1,0% -1,3% -1,5% -1,6% -1,1% -2,3% -2,4% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q

43 TURKEY 16,9% 14,7% 13,6% 12,3% 13,5% 13,7% 9,0% 13,1% 12,4% 9,9% 9,7% 8,2% 8,1% 9,5% 9,7% 9,1% 9,0% 8,9% 8,8% 9,4% 9,5% 8,1% 9,5% 6,4% 4,7% 6,4% 6,8% 9,2% 8,5% 5,7% 7,9% 5,4% 5,4% 4,7% 5,0% 2,9% 3,4% 3,6% 4,1% 2,7% 2,9% 2,4% 0,3% 2,1% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Due to exclusion of Alcohol and Tobacco, history is updated from Q

44 Bosnia Bulgaria Croatia Estonia Israel Latvia Lithuania Macedonia Romania Russia Serbia Slovenia Ukraine EXTENDED EUROPE Based on Bimonthly reporting cycles Categories covered in food and drug channels

45 BOSNIA-HERZEGOVINA -0,5% -1,4% -1,9% 1,6% 0,1% -1,3% -1,3% -1,1% -2,9% 0,1% -2,5% -2,4% -4,5% 3,3% 2,5% 3,0% 4,0% -0,5% -0,7% 3,0% -1,8% -4,0% 4,3% 7,8% 1,0% -2,6% -1,5% -3,5% -1,4% 0,0% -1,4% -0,8% -1,5% -2,2% 1,1% 0,3% -0,9% -0,2% -4,7% -8,4% -2,6% Dec-Apr 13 Apr-Aug 13 Aug-Dec 13 Dec-Apr 14 Apr-Aug ,1% Aug-Dec 14-6,6% Dec-Apr 15 Apr-Aug 15 Aug-Dec 15 Dec-Apr 16 Apr-Aug 16 Aug-Dec 16 45

46 BULGARIA 0,3% 1,1% 0,9% 2,0% 2,4% -0,5% 2,7% 1,6% 1,1% 0,7% 1,0% -1,6% -0,9% 1,5% 0,8% 0,5% 0,3% 0,1% 0,3% 0,4% 0,1% 2,0% 2,0% 2,9% 3,8% 2,0% 2,8% -0,9% -0,8% 1,1% 1,1% -0,1% 3,1% 1,5% 1,6% 2,5% 2,5% 1,3% 1,4% 1,1% 1,1% -5,5% -6,2% Dec-Apr 13-4,5% Apr- Aug 13-4,7% Aug-Dec 13 Dec-Apr 14 Apr- Aug 14 Aug-Dec 14 Dec-Apr 15 Apr-Aug 15 Aug-Dec 15 Dec-Apr 16 Apr-Aug 16 Aug-Dec 16 46

47 CROATIA - 2,1% 2,3% 2,3% 1,1% 0,0% -0,1% -0,2% - - 2,9% - -1,6% -0,4% -3,5% -3,1% 1,8% 0,8% 1,8% -1,1% 2,3% 0,5% 3,3% 0,1% 3,2% 4,3% -2,6% 0,6% -1,1% 0,2% 1,1% 0,9% -2,8% -4,4% Dec-Apr 13 Apr -Aug 13 Aug-Dec 13-2,4% -3,9% -3,9% Dec-Apr 14 Apr -Aug 14-2,4% -5,5% Aug-Dec 14 Dec-Apr 15 Apr -Aug 15 Aug-Dec 15 Dec-Apr 16 Apr -Aug 16 Aug-Dec 16 47

48 ESTONIA 6,3% 5,7% 5,3% 4,8% 3,9% 3,2% 2,5% 2,8% 2,8% 2,0% 2,3% 2,2% 2,0% 4,3% 1,8% 1,9% 3,6% 1,0% 0,5% 2,7% 2,8% 2,4% 2,4% 1,9% 0,9% 2,4% 1,1% 0,7% 1,3% 0,8% 0,7% 0,4% 0,7% 0,2% 0,3% 0,6% 0,1% 0,1% -1,5% -1,0% -1,5% -2,4% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 48

49 ISRAEL 4,4% 2,4% 3,0% 1,8% 4,9% 1,4% 1,8% 0,4% 0,4% 0,3% 0,3% 0,1% 0,5% 0,6% 0,6% -0,5% 0,5% -1,0% -1,0% -0,7% -0,4% -0,5% -0,5% -0,7% -1,1% -0,6% -1,1% -2,1% -1,9% - -2,5% -2,0% -2,8% - -1,6% -1,9% -3,4% -2,6% -2,5% -2,8% -3,8% -2,0% -4,5% -5,7% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 49

50 KAZAKHSTAN 22,1% 20,0% 24,3% 21,8% 13,2% 15,2% 15,2% 14,1% 15,8% 17,2% 17,8% 15,3% 8,9% 6,2% -1,3% -7,4% 14,1% 13,9% 13,2% 1,0% 1,3% 0,9% ON-ND 2014 DJ-JF ,2% 10,4% -2,2% FM-MA ,9% -9,7% -4,8% AM-MJ ,1% 2,3% 5,3% 7,5% 1,8% - -7,0% -5,8% -13,5% -11,8% -10,4% -9,5% JJ-JA 2015 AS-SO 2015 ON-ND 2015 DJ-JF ,9% 11,9% -3,0% 4,2% FM-MA 2016 AM-MJ ,0% JJ-JA ,1% AS-SO ,7% 0,6% ON-ND

51 LATVIA 4,1% 3,7% 3,4% 3,1% 3,0% 1,9% 2,9% 2,7% 2,0% 2,2% 2,0% 2,9% 1,9% 3,4% 3,1% 1,1% 2,0% 1,8% 2,3% 1,0% 1,0% 1,8% 1,5% 1,1% 0,9% 1,1% 1,3% 0,5% 0,9% 0,4% 0,3% 0,2% 0,0% 0,0% 0,2% 0,2% 0,1% -0,1% -0,4% -0,6% -0,4% 0,2% -0,5% -1,1% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 51

52 LITHUANIA 3,9% 2,1% 1,8% 1,4% 2,8% -0,4% -0,5% 4,2% 2,3% 1,9% 3,2% 2,4% 0,8% 3,9% 2,2% 4,4% 2,6% 1,8% 1,9% 0,9% 1,9% 1,0% 1,4% 1,9% 0,4% -0,2% -1,0% -0,9% 2,4% 5,4% 5,3% 2,8% -3,0% -0,2% 3,5% 3,0% -3,4% -7,3% -3,8% -6,1% -3,1% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Historical data has been changed as there is a change in Total Country selection from 2014 onwards 52

53 MONTENEGRO 1,6% -20,5% -18,8% 0,4% -5,9% -5,5% 0,9% 2,2% 2,4% 3,3% 3,6% -3,1% -5,6% -3,2% -19,9% -16,5% -34,4% 0,9% -30,6% 2,5% 1,5% 0,3% -0,3% -0,4% -0,7% -6,1% -11,1% -5,8% -13,9% -16,8% -9,9% -12,5% -14,3% 2,7% -0,1% 2,9% 5,7% 2,3% 3,4% 4,3% 0,7% -3,5% Dec-Apr 13 Apr-Aug 13-30,8% -29,7% Aug-Dec 13 Dec-Apr 14 Apr-Aug 14 Aug-Dec 14 Dec-Apr 15 Apr-Aug 15 Aug-Dec 15 Dec-Apr 16 Apr-Aug 16 Aug-Dec 16 53

54 ROMANIA (*) 5,6% 8,1% 8,4% 10,8% 0,6% 4,2% 6,2% 12,2% 6,3% 8,9% 14,2% 7,5% 8,5% 10,9% 9,0% 0,1% 8,9% 0,5% -0,8% -0,3% -2,5% -2,4% 1,5% 0,4% -1,1% -0,4% -1,3% - 1,6% 0,4% Dec-Apr 14 Apr-Aug 14 Aug-Dec 14 Dec-Apr 15 Apr-Aug 15 Aug-Dec 15 Dec-Apr 16 Apr-Aug 16 Aug-Dec 16 3,6% -2,8% (*) reworked data with all the major RMS categories included except for: Cigarettes, Make-up&Incontinence, reduction of VAT from 24% to 9% for food categories. New chains integration. -5,8% -6,6% -2,4% 54

55 RUSSIA 13,0% 11,6% 11,6% 12,5% 12,0% 11,3% 12,5% 12,4% 14,1% 8,7% 10,3% 15,0% 6,9% 8,3% 9,0% 9,0% 9,6% 9,9% 8,7% 9,5% 10,8% 10,6% 11,0% 10,7% 12,1% 15,0% 14,7% 14,3% 13,8% 14,0% 9,1% 9,5% 6,7% 7,0% 11,8% 6,1% 8,4% 7,2% 7,6% 7,7% 6,9% 3,1% -1,6% -2,0% -1,4% 0,0% 2,1% 0,8% 0,4% -1,9% -1,0% -1,0% -2,0% -1,5% 0,1% 1,1% - -0,9% -0,7% -3,1% -2,7% -3,5% Minor changes in back data are due to transition of Cigars, Cigarettes and Tobacco to CIP -3,8% 55

56 SERBIA 15,7% 17,4% 14,0% 6,2% 2,7% -5,4% -2,7% 3,7% 0,9% 4,0% 1,3% 0,5% -0,3% Dec-Apr 13-7,8% Apr-Aug 13 6,0% 4,3% -4,1% -10,2% -10,6% -6,3% Aug- Dec13 Dec-Apr 14 2,3% 1,4% 1,4% 0,0% -1,4% - -0,4% -4,0% - Apr-Aug 14 Aug- Dec14 Dec-Apr 15 0,9% 0,4% -0,4% Apr-Aug 15 3,9% 4,4% 4,2% -0,1% 4,6% 3,7% 2,3% 0,6% Aug- Dec15 Dec-Apr 16 Apr-Aug 16 2,4% 3,6% - Aug- Dec16 56

57 SLOVENIA 2,0% 2,0% -1,6% -0,5% -2,1% 1,5% 0,7% -0,8% -2,5% -0,6% -2,7% 0,8% -1,4% -0,5% -3,2% 0,1% -4,6% 0,6% - -1,0% -1,0% -2,6% -0,7% -0,9% -1,4% -1,8% -2,0% -2,0% -2,4% 3,1% -1,0% 2,5% -0,5% 0,7% -0,9% -1,6% 0,0% -2,5% -2,5% 0,3% -4,2% Dec-Apr 13-1,1% -4,3% Apr-Aug 13-4,5% Aug-Dec 13 Dec-Apr 14 Apr-Aug 14 Aug-Dec 14 Dec-Apr 15 Apr-Aug 15 Aug-Dec 15 Dec-Apr 16 Apr-Aug 16-3,9% Aug-Dec 16 57

58 UKRAINE 11,3% 1 0,1% 25,7% 35,8% -10,1% 10,9% 16,6% -5,7% 21,6% 3,3% 18,3% Dec-Apr 13 13,9% 3,1% 10,8% Apr-Aug 13 11,8% 3,8% 8,0% Aug-Dec 13 9,9% 7,0% 4,1% 10,5% 2,9% Dec-Apr 14 18,5% -0,6% - Apr-Aug 14 16,9% Aug-Dec 14 24,2% 30,0% -5,8% Dec-Apr 15 28,6% 40,7% 24,2% 36,6% -12,1% -12,3% Apr-Aug 15 Aug-Dec 15 18,6% 27,7% -9,1% Dec-Apr 16 8,6% 12,2% 6,4% 9,9% -3,6% -3,5% Apr-Aug 16 Aug-Dec 16 58

59 APPENDIX

60 APPENDIX: GLOSSARY Nominal value growth: Percentage change in value sales (expenditures) as measured by the total basket of reported product categories Unit value growth ( price change): Percentage change in the average retail price per unit in the total basket of reported product categories The unit of volume in the basket varies by category (e.g. litres, kilograms, tonnes, etc) The change in average price per unit may result from: Price changes of individual products Change in the mix of purchased products; more or less expensive products, more or less promotions, etc. Channel switching; more or less purchases in discount stores, or hypermarkets, or convenience outlets, etc. Product or channel mix changes may be induced by price change or may just be the result of market dynamics. The unit value growth reflects how consumers experience cost of living in their actual grocery shopping behavior. Volume growth: Percentage change in purchased volume (quantity) of products The three components are related: ValueGrowth = UnitValueGrowth * VolumeGrowth 60

61 APPENDIX: CALCULATIONS For each country, the value growth index V and the UnitValue growth index I have been calculated for each available product category c. V c t 1; t = SalesValue[ c, t] SalesValue[ c, t 1] The overall UnitValue Index across all categories has been calculated as a weighted average of the category indexes where each category is weighted according to its share in the covered expenditures in the end period (Young Index). I c t 1; t = SalesValue[ c, t] SalesVolume[ c, t] SalesValue[ c, t 1] SalesVolume[ c, t 1] Volume, Value, UnitValue growth indexes are multiplicatively related to each other : ValueGrowth = UnitValueGrowth * VolumeGrowth For ease of presentation, the relative volume change (in percentages) has been approximated by taking simple differences (difference is immaterial) : VolumeChange = ValueChange UnitValue change I t 1; t c c c = w I w = c t t 1; t t SalesValue[ c, t] SalesValue[ c, t] c More detail on subject, see : ILO Consumer Price Index Manual: Theory and Practice. es/cpi/index.htm 61

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