European Retail Overview

Across Magazine, in conjunction with GFK, released their study on European retail: 2018 review and 2019 forecast. The report has uncovered some refreshing statistics and predictions, lots of positive trends coming through including growing spending power, increasing turnover for bricks and mortar and improving economies.

Across Europe, spending power is experiencing an upward trend: 2018 saw +3% more capita purchasing power in the EU (including the UK) reaching an average of €16,878. Poland stood out with significant purchasing power gains, completing the year with +7.7% growth. In addition, countries that joined the EU after the eastward enlargement saw noteworthy increases with Latvia and the Czech Republic growing +10.3% and +9.3% respectively.

Brick and mortar retail turnover growth was minimal in Western Europe: +3.6% growth in France was the highest recorded. However, on a more positive note, Eastern Europe had an optimistic year with Bulgaria and Romania both seeing growth above +7% and Hungary and Poland both above +5%.

The report considered and evaluated changing economies to ensure predictions are accurate for the coming year. Following Spain’s minimum wage increase of +22% at the beginning of the year, the country is expected to enjoy strong retail sales growth. Similarly, the tax system alteration in France (changing annual collection to monthly deduction) is expected to potentially negatively affect consumer mood initially, but ultimately, result in an overall uptick in bricks and mortar retail sales. Furthermore, in Eastern Europe, Romania and Lithuania are anticipated to have the highest growth rates with +7% and +5.9% respectively on the back of rising incomes and tax relief.

For the UK, the uncertainty surrounding Brexit is making any predictions difficult to define. However, willingness to spend has been on the increase already this year: February 2019 saw the countries propensity to spend index climb +5 index points.

The macro factors affecting the retail industry cannot be controlled or prevented, however, it is promising to see an abundance of positive trends across the EU. Despite the on-going political uncertainty and continued growth of online retail, the statistics going into 2019 are looking strong for bricks and mortar retail.