Credit Crunch Update: No Green Shoots in EU Retailing Q1/2 2009

Introduction

Most consumers in the EU have reached the peak of private indebtedness, as unemployment rates are rising, consumer confidence is dipping and consumer credit becomes increasingly hard to get hold of. This brief provides an update on this contracting economic activity.

Scope

• Macro economic data on 27 markets, structural indicators and forecasts for each of the 27 EU countries.
• Analysis of the major threats in the market, price developments and the immediate response of European governments and retailers.
• Detailed chapters on three months of trading updates from the EU, with recent developments and future outlook.
• Appraisal of strategic issues, Lidl's latest initiatives and Arcandor's insolvency, Germany's biggest casualty of the crisis so far.

Highlights

We find ourselves slogging through the bleakest economic landscape most of us have known in our lifetimes. Verdict expects that the recession in the EU will end sometime perhaps as early as 2010. That would make it the longest and probably deepest downturn since the Great Depression.

Eventually, old and broken down goods will need to be replaced, and the resulting demand will drive economic and retail sales growth. That said, we expect the pace of the recovery will be extremely slow. We are not through the worst yet. We believe that yet more retail casualties such as Arcandor are around the corner.

We are also sceptical about capacity shifts. While insolvencies are usually good news for rival surviving retailers as they stand to gain market share, we are now operating under conditions of severe financial stress and consumer confidence at rock bottom levels. This means that capacity might simply disappear altogether as demand collapses.

Reasons to Purchase

• Learn how difficult market conditions are driving competition among retailers and what the outlook for EU retail will be in the short to mid-term.
• Understand how evolving consumer behaviour is forcing retailers to develop new product, sales and marketing strategies in a profoundly changed market.
• Identify the remaining success stories and growth prospects of the key markets and competitors and benchmark their performance.