Dallas, Texas (PRWEB) August 04, 2013
In line with the characteristics which can be expected of a mature fmcg industry and with the recession into which Italy fell again in 2012 for the fourth time since 2002, tissue and hygiene experienced limited volume and value growth. Furthermore, key demographic factors, such as strong deceleration in population growth from both immigrants and newborn babies, were of little assistance to this industry to gain a positive performance. Value growth overall was just slightly higher than volume growth in 2012 as sustained increases in cost of raw materials continued to put average retail prices under pressure.
Ageing population driving sales of incontinence products
Demand for incontinence products continued to increase as a result of the ageing population; in fact the rising trend was registered not only in value terms but also in volume, meaning that the category has not fully penetrated the market yet. There was in fact a source of new users and buyers for both the retailing and away-from-home markets. Furthermore, the stigma surrounding incontinence is lessening, which is opening up incontinence products to a broader audience.
Private label continues to gain ground
As a whole, private label represented more than 25% of the overall value sales of tissue and hygiene in 2012. These economy brands offered a large range of products in all categories of tissue and hygiene and private label held significant weight in tissues in particular. The value for money element continued to attract consumers in 2012. The two leading manufacturers, Fater and Kimberly-Clark, nevertheless were able firstly to maintain their top positions as they benefit from a large consumer base which opted for high-priced brands, secondly to offer additional value such as comfort and greater efficiency.
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Consumer spending power is still weak, though improving, in Hungary. Nonetheless, retail tissue and hygiene value sales grew faster in 2012, compared to 2011. The growth in retail value sales was generated by higher unit prices; volume sales lagged by comparison as customers were unable to raise consumption significantly. Incontinence and nappies/diapers/pants recorded faster retail volume sales growth than almost all other tissue and hygiene types, because of greater penetration and more frequent usage. Consumers found a wider range of these products and they could choose the ones that best suited their needs.
Unit prices increase below the rate of inflation in 2012
Consumers are still price sensitive as their disposable income did not increase strongly. As consumers are reluctant to increase their purchases if prices are raised significantly, and because many tissue and hygiene product types are not considered essential, manufacturers introduced price rises below the rate of inflation, which reached 6% in 2012. Only starter kits/sweepers/sticks (excluding wipes) recorded above-inflation unit price growth, though these products are purchased mainly by wealthy consumers. Nonetheless, as prices increased retail volume sales stagnated in toilet paper, sanitary protection, cotton wool/buds/pads and paper tableware.
Private label growth slows
Due to the expansion of discounters and the widening private label range in hypermarkets and parapharmacies/drugstores, customers can find more good quality mid-priced or economy tissue and hygiene products. Hungarian consumers are price sensitive and they tend to choose the cheaper product if it is of a similar quality to a higher-priced option. Private label benefits from this habit as customers often chose cheaper private label products instead of commercial brands. As a result, private label accounted for one third of retail value sales. However, the pace of growth in private label’s share slowed towards the end of the review period. Brand loyalty is also an influential factor in many product areas and economy brands perform well by offering the lowest prices. Thus private label found it harder to grow retail volume and value share, in general, and customers did not raise their consumption strongly in most product areas of the industry.
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