Retail market for consumer durables in trouble across Europe, study shows

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Trade credit insurer Atradius has released the latest edition of its Market Monitor report, focusing on the market for consumer durables in retail markets around the world. 

In many countries, the retail industry – especially the sector dealing in consumer durables like kitchen white goods, furniture, electronic entertainment and communications – is in trouble, it says.  

The Market Monitor shows the consumer durables retail sector across Europe is grappling with the toxic combination of higher costs, lower margins, and ferocious competition for dwindling consumer demand. 

There is now also a real danger of rising inflation adding to the pressure on consumers and retailers alike, said Atradius.

Its verdict on Ireland, for example, states: “Unemployment remains high… and the government’s austerity measures are limiting disposable incomes… putting pressure on retailers and consumers alike.”  

It’s the same story in Spain; with high unemployment, falling disposable income, austerity measures and a reluctance of banks to grant loans, said Atradius.

The company’s report on the Netherlands claims the fate of some facets of the industry is linked closely to the housing market; while its report on France makes the point that, even success stories, like the tablet computer, erode market share for PCs and thus for those retailers focused on that segment. 

Competition from online sales also challenges the traditional high street – a signal for retailers to adapt their strategies, argues Atradius. 

There are some exceptions to the gloomy trend, however. Unsurprisingly, of all the European markets the company reviews, demand for consumer durables in Germany is showing healthy growth. And, in the US, a rebound of existing home sales could stimulate the sale of household appliances and furniture, it says.

However, in both markets persistently higher inflation driven by rising energy prices could dissuade consumers from purchasing durable goods. 

Brazil is confirming its status as a leading emerging market, claims Atradius. All its consumer durables indicators register robust growth, reflecting the country’s overall economic performance and rising household incomes – and that could also spell good news for foreign exporters targeting Brazil, the company claims.

Retail Times’ readers can read the report Click here