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Hungarian Retail Trade Turnover Has Increased One and a Half Times in the Last Five Years

GfK Hungária: Unbroken Expansion of Hypermarkets in Hungary

The structure of retail trade does not show a uniform picture in the Central Eastern European region. While it is small shops that have the biggest part of the market in the would-be member states of the European Union, it is hypermarkets that are gaining ground in the Visegrád Four countries.

The turnover of fast moving consumer goods has been increasing unbrokenly since 2000, and had increased by about 55% by the end of last year compared to the turn of the millennia. At the same time, no significant changes have occurred in consumers’ buying behaviour – the Trade Analyses 2005 of GfK Hungária Market Research Institute has found.

The structure of retail trade shows a quite mixed picture in the countries of the Central Eastern European region. The market share of small groceries in the countries belonging to the next round of the European Union enlargement is 61% in Bulgaria, 56% in Romania, and 40% in Croatia, whereas the similar proportion in the EU member states is lower mainly due to the expansion of hypermarkets (Poland: 38%, Slovakia: 34%, Hungary: 31%, Czech Republic: 21%).

In the Eastern part of Europe, in Russia and the Ukraine, for the time being it is the unorganised forms of trade such as street vendors and markets that have the highest turnover: these channels of distribution account for 31% of the turnover in Russia and nearly for half (46%) in the Ukraine. Small shops have an important role, however, the market share of other channels – especially cash & carry and hypermarkets – is markedly low.

Chart 1 Share of shop types on the market of fast moving consumer goods in the countries of the Central Eastern European region, 2005 (percentage)

The retail trade turnover in Hungary has been increasing continuously since 2000, and has increased over one and a half times: while it was HUF1,445 billion at the turn of the millennia, the sales turnover reached HUF2,234 billion in 2005. With the exception of hypermarkets and chains of small shops, which realised a nearly 10% increase in the market share, the share of all the other channels has decreased in the last five years. It is independent small shops that have suffered the biggest fall as regards proportions (their market share has decreased by about 12%).

The development of the market share of the different channel types depends on several factors, on the different shop types, that is, on how the proportions of households doing their shopping develops compared to all of the households. Although more and more households visit hypermarkets regularly since 2000, as regards buyer reach, independent small shops are still in the lead ahead of shops with a large selling area and an offer of a wide range of goods, but GfK’s researchers have found a decreasing tendency in this respect. The market share of cash & carry shops has fallen to half of that surveyed in 2000; this is the channel type that has lost the highest proportion of customers – 7.7%.

Market share of channel types on the market of fast moving consumer goods, 2000-2005 (percentage)

The weight of the different days is unchanged on the whole: Hungarian households still do most of their shopping on Fridays – this day accounts for about a fifth (21%) of the whole week’s turnover. Saturdays also have an outstanding role, and Thursdays have a relatively high share in the turnover as well.

An overwhelming majority of the purchases take place in the morning hours between 9 a.m. and 1 p.m.: over a third of the daily FMCG spending – 37% of it – is done in this 3-hour period. The role of the parts of the day shows a different picture from the average in the case of the different channel types. Perhaps not surprisingly, 42% and 43% of the turnover of the small shops in chains and independent small shops respectively is realised early in the morning, during the period before 9 a.m. In the case of hypermarkets the sales turnover is by and large evenly distributed during the 9 a.m. to 9 p.m. period at around 30%.

Shops that can be accessed by car have been increasing their share in the value of the turnover since 2003 mostly to the disadvantage of shops that can be accessed on foot. Cash & carry type shops and hypermarkets have an outstanding role in this trend, since 87% of the amount spent in c&c shops and 75% in hypermarkets come from shoppers who do their shopping using a car.

The use of modern cashless ways of payment such as bank cards for purchasing fast moving consumer goods is stagnating and is about 10%. Twenty-eight per cent of the value turnover of hypermarkets and 14% of the second placed drug stores come from bank card payments. Housewives are still mostly responsible for shopping – although cash & carry shops and hypermarkets are the exceptions to this trend, and husbands and wives mostly do their shopping together there (c&c: 39%, hypermarkets: 29%).

The survey has been conducted by GfK Market Research Institute, Hungary’s leading market research institute.

The GfK Group

The GfK Group is the No. 5 market research organization worldwide. Its activities cover five business divisions, Custom Research, Retail & Technology, Consumer Tracking, Media and HealthCare. In addition to 13 German subsidiaries, the company has over 130 subsidiaries located in 63 countries. Of a current total of around 7,800 employees, approx. 80% are based outside Germany. For further information, visit our website:www.gfk.hu

20.4.2006