ZOOM INTO CONSUMER TRENDS Gabriela Luca Research Executive Consumer Panel Services

September 5th 2012 © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Agenda

1

The Big Picture

2

In-Home Consumption Trends

3

Final Thought

© GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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The Big Picture

© GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

3

Romania Macroeconomic Environment

GDP Real Growth % 1,0 2,5

Romania

-1,3 0,0 1,5 2

EU-27

2012

2011

2010

Source: WIIW forecasts, March 2012; National Institute of Statistics – Romania for Inflation % © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Big Influencers

Left

In

Source: WIIW March 2011 & Deskresearch © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Unemployment Level

GDP Real Growth % 7,5 7,3 7,3

Romania

9,8 9,6 9,7

EU-27

2012

2011

2010

Source: National Institute of Statistics © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Expected Employees Company Lidl Mega Image

No. New Employees 1.300 – 3.600 1.600

Profi

500

Billa

500

Kaufland

400

De’Longhi

600 – 1.000

Eolenvest

880

Autoliv

600

Wienerberger

400

Emerson

400

Bosch

300

Cesiro din Sighisoara

150

Preh Romania

120

Yazaki

100

Energias de Portugal (EDP)

100

Deichman

85 – 90

Iberdrola

80

Source: Ziarul Financiar, February 2012. Note: In retailers case, this years hiring estimations were made based on medium number of emplowees of a store. In eolian parks case, the number of jobs was estimated based on the number of MW, taking in consideration that a MW creates 1,7 jobs. © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Wage change in line with price changes

Average Net Wages per person, RON

Inflation, %

1520

1475

6,1%

5,8%

1407 3,1%

2010

2011

HY 2012

2010

2011

2012

Source: National Institute of Statistics & European Commission © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Purchasing power comparison in Europe Year 2010/2015*

Parity of purchasing power (Austria=100%) 100100

Austria = 100

94 95 80

83

80 79

78 80 69 71

66 65

64

71

67 59

59 49

A

D

SP

EU27

GR

SLO

P

CZ

SK

HR

51

55

H

50 51

PL

52 54

EE

46

52

LT

41

46

41

RUS

45

LV

38 39

TR

36 38

RO

35

38

BG

30

36

28 30

KAZ MAC

21 23

BA

18 20

UA

Source: WIIW, July 2011 I *projection assuming a 50% of the average growth differential with respect to EU-15 from 2014. © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Consumers Mindset 20 10 0 -10

UE

-20

Poland

-30

Romania

-40

Germany

-50 -60

-80

ian.-08 feb.-08 mar.-08 apr.-08 mai.-08 iun.-08 iul.-08 aug.-08 sep.-08 oct.-08 nov.-08 dec.-08 ian.-09 feb.-09 mar.-09 apr.-09 mai.-09 iun.-09 iul.-09 aug.-09 sep.-09 oct.-09 nov.-09 dec.-09 ian.-10 feb.-10 mar.-10 apr.-10 mai.-10 iun.-10 iul.-10 aug.-10 sep.-10 oct.-10 nov.-10 dec.-10 jan.-11 feb.-11 mar.-11 apr.-11 mai.-11 iun.-11 iul.-11 aug.-11 sep.-11 oct.-11 noi.-11 dec.-11 ian.-12 feb.-12 mar.-12 apr.-12 mai-12 iun.-12 jul.-12 aug.-12

-70

Source: GfK Omnibus, Consumer Confidence Barometer I Base: National 15+ (Ian 08 – Mai 12); ~1000 respondents (all) /wave; % The consumer confidence indicator is calculated based on answers to the questions on the financial situation of households, the general economic situation, unemployment expectations and savings, all over the next 12 months. © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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41% of the budget goes to food and beverages Average annual personal consumption per household, %

Food and beverages Alcoholic drinks and tobacco

41

42

41

7 7

8 5

7 4

16

16

20

5 4 11 5 1 4

4 5 11 4 1 4

4 5 11 4 2 4

2008

2011

Q1'12

Clothing and footwear Housing and energy Furniture, equipement and maintenance Health services Transport and communication

Education; Recreation and culture Hotels and restaurants Other goods and services

Source: National Institute of Statistics – Romania © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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In-Home Consumption Trends

© GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Value growth, but volume is still going down Value Change % (RON)

25%

21%

17% 19%

11%

7%

7%

1999

2000

2001

2%

-5%

-9%

-11%

5%

6%

10%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Jan-June 2012*

Source: GfK Consumer Panel Services, based on monitored FMCG categories I *versus JanJune2011 © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Food the most affected segment by the decrease of value per trip Value change%

Food

4

2

FMCG

4

-2

Beverages

5

Personal Care

5

Home Care

Value per trip (RON) change%

Frequency change%

2

-2 -6

4

1

1

3

3

-1

Source: GfK Consumer Panel Services, based on monitored FMCG categories I Jan-Jun 2012 vs. Jan-Jun 2012 © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Personal Care is on a recovery path Volume Change %

Chocolate Tablets Fruit Yoghurt Edible Oil Coffee (R&G)

-11

Windows Cleaners

-7 -6 -4

Plain Yoghurt Juices Mineral Water Beer

Hand Dishwashing Toothpaste

0 1 1

-6 -4 -1

9

Toilet Soap

7

Hair Shampoo

4

Deodorants

6

GfK Consumer Panel I Jan-Jun 2012 vs. Jan-Jun 2012 © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Modern Trade reaches 49% value share Value Share % Hypermarkets

21

23

24

Supermarkets

13

14

14

Discounters

10 1

10 1

10 1

40

37

35

4 11

4 12

3 12

2010

2011

Jan-May 2012

Cash&Carry Small Grocery

Street Vendors Others

GfK Consumer Panel Services based in monitored categories © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Outlet Types Drivers Penetration %

Purchase Frequency

58

Hypermarkets Supermarkets

50

Discounters

49

Cash & Carry

16 11

10

4 79

Small Grocery Street Vendors Jan-May'12

14

46

35 8

Jan-May'11

GfK Consumer Panel Services based in monitored categories © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Promotions value share is bellow the average Promotions Value Share % 49 35

33

28

12

Romania

17 9

9

Bulgaria

Serbia

19

18

Germany

Spain

8 Czech Republic

Hungary

Slovakia

Poland

France

UK

Source: GfK Consumer Panel Services I Europanel I 2011 © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Private Labels continue to gain ground Slovakia 28%  29% Hungary 28%  27% Poland 21%  24% Czech Republic 19%  20%

Croatia 16%  18% Bulgaria 6%  10% Romania 8%  11%*

Source: GfK Consumer Panel Services I Calculation based upon consumer basket including monitored product categories I 2010  2011 Value % I *Jan-May 2012 vs Jan-May 2011 © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Private Labels Growth Drivers Private Label Value Share across FMCG Segments (RON) Total FMCG

8

Food

Personal Care

5

2

Home Care

JanMay2012

Frequency

89

11

13

Beverages

Penetration

4

49

3

24

2

16

2

49

3

41

10

10

56

16

7

8

12

86

6

82

80

8

7

8

JanMay 2011

Source: GfK Consumer Panel Services © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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Take away snapshot

© GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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FMCG Value Growth, but Volume going down

Private Labels enter new categories, gain buyers and build loyalty

Personal Care regains some of the lost volume

Food the most affected by volume cut

© GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

Modern Trade reaches half of spending for FMCG

Promo Share bellow regional average

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THANK YOU FOR YOUR ATTENTION!

Gabriela Luca I Research Executive Consumer Panel Services I [email protected] http://www.gfk-ro.com/ © GfK 2012 | Romanian Consumer Trends 2012 | 5th September 2012

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