European FMCG sales growth remains at just 1.7%, Nielsen reports

FMCG sales growths for the first quarter of 2014, aggregated across Europe, were up just +1.7% year-on-year for the second consecutive quarter, according to the latest figures released today by global information and insights company Nielsen.

The 1.7% nominal value rise was driven by 2.3% price inflation – which hasn’t been lower since Q1 2011 – offsetting a 0.6% fall in sales volumes. Only two quarters in the last 21 have seen ‘nominal value’ rise less than 1.7%.

In Q1, Turkey experienced the highest nominal year-on-year sales growth (+9.7%) among the 20 European countries measured, followed by Portugal (+4.5%) and Norway (+3.9%). Of the big five western European markets, France (+2.4%) had the highest nominal growth.

E.g. Europe’s 1.7% value sales growth was accounted for by a 2.3% increase in unit value (price inflation) and a 0.6% decrease in unit sales (volume)

Five of the 20 countries experienced a year-on-year decline in nominal value growth; Poland and Italy (both -2.3%) had the largest decreases followed by the UK (-1.6%).

Explaining the figures, Nielsen’s European director of retail insights Jean-Jacques Vandenheede, said: “The European FMCG market is stable but still relatively negative. Although all countries except Greece are experiencing price inflation this isn’t enough to offset the negative sales volumes, primarily being experienced by three of the big five western EU markets – UK, Germany and Italy.”

“However, despite two consecutive negative quarters, we still expect to see volumes improve next quarter, overall, boosted by a ‘late’ Easter and general optimism around the football World Cup.”

Price inflation
The nominal increase in FMCG sales value across Europe is being driven by price inflation rather than volume increases. European FMCG price inflation remained at 2.3% year-on-year in Q1 2014. Four of the 20 measured European countries experienced price inflation above 3.0%; only Greece experienced year-on-year deflation.

European FMCG sales volumes in Q1 2014 decreased -0.6% year-on-year for the second consecutive quarter. Of the 20 countries measured, over half (12) experienced an increase in volume sales, compared to eight of 21 countries in the previous quarter.