GfK anticipates a 2% increase in retail sales (brick-and-mortar) from the 27 EU countries analyzed (excluding the United Kingdom) in 2019. The highest growth rates are expected to have Romania (7%) and Lithuania (almost 6%). It is also forecast growth for Spain (2.4%) and France (2.8%). These are some of the results of the latest GfK European Retail Market, available for free here.
Most European consumers are now divided between opposing forces. On the one hand, there is uncertainty about Brexit, trade conflicts and weaker growth prospects in major export markets, such as China. But, on the other hand, Europe has a solid labor market, higher wage growth and moderate oil prices. In this context, GfK's geomarketing solution assessed key European retail indicators and published results in the European Retail survey in 2019.
The study looks at trends and developments in 27 European countries and provides a turnover forecast for 2019, giving retailers, investors and project developers an important benchmark for decision-making.
"GfK forecasts in 2019 a 2 percent increase in retail for physical stores for European countries," explains Dr Johannes Schamel, a retail expert. "This growth is just above the inflation rate and comparable to the growth observed last year."
The most important results of the study:
Purchasing power: In 2018, every citizen of the 27 countries analyzed had an average purchasing power of 16,878 euros. This equates to a nominal increase of 3% over the previous year. The ten nations of the EU with the largest increase in purchasing power per capita this year have a lower purchasing power than the average.
Even if growing, the purchasing power in Romania is among the smallest in Europe. Purchasing power in Romania remains among the lowest in Europe. The situation is similar to Croatia, Bulgaria, Serbia, Montenegro, Bosnia - Herzegovina, Macedonia, Albania and Turkey.
Turnover Forecast for 2019: Considering the continued growth of online commerce, GfK anticipates a 2% nominal turnover growth for the countries under review. The highest growth rates among EU countries are expected for Romania (7%) and Lithuania (almost 6%).
The Inflation: The fall in energy prices since the end of last year is an indicator that the inflation rate in the EU will fall. Along with continuing commercial litigation with the US, the weakening of the European economy in early 2019 dampens the optimism of economists. As a result, an inflation rate of less than 1.6% for the European Union is expected in 2019. For Romania, the projected inflation for 2019 is 3.3%, one of the largest in Europe.
Share of retail space per capita: While the share of retail space per capita for all European countries also increased in 2018, this happened to a significantly lower level than in previous years. The EU-wide increase in this share was counterbalanced by population growth. Taking into account this, the share of commercial spaces per capita remains at the value of the previous year, of 1.13 m². Among the top three countries are Belgium (1.66 m² / capita) and the Netherlands (1.60 m² / capita), as well as Austria (1.62 m² / capita). In Eastern Europe, Croatia (1.16m² per capita; + 2.8%), Bulgaria (0.77m² per capita; + 1.7%) and Romania (0.73m² per capita; + 1.7%) managed to earn the most land, Romania and Bulgaria continue to be at the bottom of the EU ranking.
Profitability of commercial spaces: At European level, there has been no change in the ranking of the top three countries over the previous year in terms of sales area productivity. The undisputed winner continues to be Luxembourg (about 7250 € / m²), which even grew slightly (1.4%) in 2018. The second and third places are occupied by Norway (approximately 6430 € / m²) and Switzerland (approximately 6220 € / m²).
Turnover is significantly lower amongst retailers in EU countries in the east and south-east. With spaces between 2680 € / m² and 2760 € / m², Romania, Poland and Bulgaria have the lowest profitability rates in the EU. Even so, these countries are among those boasting the biggest gains and annual increases from 5.7% to 6.7%, which means that they slowly but surely reduce the gap with other countries.