Cosmetics market worth EUR8.6bn in Central Europe
Total sales of cosmetics in Central Europe grew by 2.3% (at local currencies) in 2011 and reached the value of €8.6bn. This was a higher growth rate than in 2010 but visibly lower than during the 2008-2009 period. The highest increase, of 3.2%, was recorded in Poland, which accounts for more than a half of total cosmetics’ sales in the region, as indicated in the latest PMR’s report “Cosmetics retail market in Central Europe 2012. Market analysis and development forecasts for 2012-2014″.
2011 was another year of poor economic condition in Central Europe. The difficult and uncertain situation on the CE labour markets, as well as fiscal austerity measures (such as wage and staff cuts in public administrations in Romania, Slovakia, the Czech Republic and Bulgaria, as well as VAT tax increases in Poland and Slovakia), constrained the income of households and their propensity to consume. The only exception was Poland, which noted a robust, over 3%, year-on-year growth of private consumption.
In 2012 the overall value of the CE cosmetics market is expected to grow further, though only at a rate of 1.5%. Two countries, namely Bulgaria and Slovakia, are predicted to see higher growth rates compared to 2011. Romania and Poland will be growing the fastest with a rate of 2.2%. In case of Romania this is, however, much lower than previously predicted. The initial expectations of many players on the Romanian cosmetics market, who had indicated a growth of their sales this year ranging between less than 10% and others a two-digit surge, have been tempered during 2012.
The Czech Republic and Hungary are forecast to experience decrease in cosmetics sales in 2012. InHungary, macroeconomic indicators are again deteriorating in 2012, which is why the market expects further stagnation of cosmetics sales. Sales increases can only be the effect of higher inflation (CPI forecast at 5.6% in 2012) as a result of a VAT increase from 25% to 27%, while sales by volume are not expected to grow during next years. In the Czech Republic both economy and private consumption are declining and growth of wages does not offset rising prices.
As for 2013 and 2014, PMR forecast that sales of cosmetics will eventually increase in all the countries in the region.
Teta as the largest cosmetics store chain
Czech’s Teta is the largest chain in the region, with 1,050 drugstores operating in two countries, the Czech Republic and Slovakia. Teta’s number of stores also includes the Czech-based Schlecker chain, the acquisition of which was accepted in June 2012 and is to be finalised by the end of the year.
The second most numerous cosmetics store chain belongs to Rossmann (the company owns 980 stores in the region), which is followed by DM with nearly 670 outlets. All the remaining regional chains are much smaller, comprising less than 200 stores.
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