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Germany Food and Drink Report Q1 2008Published by: Business Monitor International Published: Feb. 20, 2008 - 71 Pages Table of Contents
AbstractAn economic upturn in 2006 and 2007, which has been fuelled by strong demand for Germany’s exportsin both developed and emerging markets, is yet to filter through fully to wages and therefore to consumerconfidence and consumer spending. However the country’s strong GDP growth is finally starting to beregistered by employees, with union wage demands notably higher than in previous years and salariesstarting to increase. The country’s prolonged period of economic stagnation means that many consumersremain wary, however, if Germany’s strong economic performance continues BMI believes consumerspending will start to significantly rise - a development which could have a significant impact on thecountry’s food and drink sector as discussed in BMI’s newly-published Q108 Germany Food & DrinkReport.For the last 15 years, the country’s economic problems and resulting high unemployment has played intothe hands of the discount retail channel, which emphasises low prices and a no frills retailingenvironment. German discounters such as Lidl and Aldi, as well as conventional retailer’s own discountformats, such as Edeka’s Netto, have expanded rapidly over this period. The country’s economic woeshave also been partly responsible for the dramatic rise in private-label products, as price-sensitive Germanconsumers spurn brands in favour of value. However, in BMI’s opinion the economic upturn may wellusher in a new set of trends that will govern Germany’s food and drink sector over the next few years.A move towards premium products, witnessed in many developed markets that have been recordingstrong economic growth such as the United Kingdom and the US, has yet to be full embraced by Germanconsumers. However this is likely to be a result of the country’s poor economic growth and a drop inunemployment and a rise in wages is likely to see more premium products find a market in Germany. Amove towards premium products may also mean stronger growth for Germany’s supermarket andhypermarket sector, which has suffered at the hands of the discount sector. There are already signs thatretailers are looking to capitalise on this economic recovery with more upmarket store formats in primelocations; retailing giant Rewe has announced plans for a more up-market supermarket format andretailer Tengelmann has announced it will remodel 50 outlets into more up-market stores. Get Full Details About This Report >> |
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