3.6 Pct Rise in Households' FMCG Spending April-June 2007

In the period April-June 2007, the total consumption of fast-moving consumer goods (FMCG) went up 3.6 pct in value terms compared with the same period a year earlier.

The sales of cold drinks made up the biggest contribution to that rise; their consumption went up by more than 17 pct in value terms versus the second quarter of 2006. The increase can be attributed to the high temperatures at the end of winter and during spring.

The biggest growth was registered in the purchases of ice tea, natural juices and nectars.

The rise in the average consumption was accompanied by a rise also in the average price. This was mostly observed in bottled water and carbonated non-alcoholic drinks, 14.5 pct and 11.4 pct, respectively.

Next in terms of contribution to the overall rise came the personal hygiene products and cosmetics; more specifically, the purchased quantities of shampoos and deodorants and the increase in the average price of feminine hygiene products.

Detergents and cleaning products, as well as beer, also grew by value. As a whole, spending on dairy products and packaged foods were almost without change.

The dynamics in the structure of commercial channels is being dictated by Kaufland. The German chain managed to attract 4.0 pct of the entire households’ spending on fast-moving goods. The significance of supermarkets and hypermarkets continues to grow, albeit at slower rates than in the same period of 2006.

Thanks to METRO and the heightened sensitivity of consumers to the average prices, the end consumption at the cash-and-carry chain is gaining greater momentum than in the previous several quarters.

Beside the bigger shares of the modern distribution channels also the share of spending on own brands is on the rise. Although their signficance is not very big due to their small share, the growth in the consumption of own brands was nearly 50 pct in annual terms in the second quarter of 2007.

Undoubtedly, the unfavourable climate leads to a rise in the avarage prices, and this is additionally boosted by the increase in the prices by middlemen and traders. These factors determine the significant rise in the prices of basic goods, which will be a stronger factor for the households’ consumption trend by the start of autumn.

1-7/09/07, P41

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