Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
GLOBAL MACROECONOMIC SCORECARD: THE LARGEST EUROPEAN ECONOMIES Presented by: Doug Hermanson Economist March 2013 Current Retail Conditions Broad-based economic declines in the largest countries • Consumer spend Summary of Macro Factors Affecting Retail* is weak but Q4 2012 or Latest Available Month* positive in France, Major European Countries Country Germany, and France Germany Italy Spain UK Indicators U.K. GDP, Annualized Growth Rate* Residential & Business Investment* • Except for food in Consumer Spending* U.K., low inflation Retail Sales is propping up unitConsumer Confidence CPI Headline Index demand—but CPI Food Index inflation may loom CPI Core Index with easy money, █ = IMPROVING █ = MIXED █ = WORSENING weak currency • Spain, Italy wilting under austerity 2 * GDP, Investment and Consumer Spending are quarterly through fourth quarter of 2012; Remaining indicators are monthly through December, January, or February 2013 Source: EuroStat, UK National Statistics, Spain National Institute of Statistics and Kantar Retail © Copyright 2013 Kantar Retail 2 The Macro Outlook for Retailing in Europe Recession, stagnant growth may persist beyond 2013 • Recessionary environment most severe in Italy and Spain, but marked growth absent in all Europe’s major economies • A contraction in Germany and France is an ominous sign, given their key euro zone role • United Kingdom faces stagnant growth Source: Kantar Retail Short Term (6–12 months) Long Term (2–5 years) Growth will be flat-toFrance negative for economy Long-term growth weak unless creates better business environment Faces spotty growth and At risk of persisting weak growth given toll of key role Germany recession threat, given weak exports to neighbors in support of euro zone Declines likely to worsen Faces stagnant growth unless cuts public sector, Italy given political stalemate adds pro-growth initiatives Continued recession as Slow-evolving austerity measures likely to result in Spain government cuts remain sharp persisting stagnant growth Flat-to-negative growth due With austerity measures United to austerity measures; easy extended through 2018, Kingdom monetary policy may ignite growth is likely to remain inflation pressures weak to modest Recession with uncertain Growth will be tempered by Net path toward growth persisting austerity and Outlook slow pro-growth reforms © Copyright 2013 Kantar Retail 3 Summary Conclusions and Implications • Short vs. Long Term. Expect continued contraction in most of the euro-zone economies in the coming quarters. Renewed growth hinges on a more credible plan for the euro crisis. • Prices/Costs. Plan on global cost pressures that remain relatively modest for most markets in 2013 as a result of moderate global demand growth in the short term. • Europe. Plan for growth across euro-zone countries that is flat or falling in the worst cases through 2013, if not longer • Expect Italy and Spain’s path toward growth to be uncertain and even unlikely by 2015 without a more credible plan for the euro crisis • Do not expect Germany to bounce back to healthy growth in 2013 • Look for France to become a bigger drag on the region • Expect the United Kingdom to continue to flirt with recession as it tries to cushion austerity with easy monetary policy; risking further acceleration in inflation © Copyright 2013 Kantar Retail 4 European Markets: Economies Contracting Broad-based declines, led downward by Italy and Spain • Renewed declines in U.K. and in France in Q4 • Matching worst decline since 2009 in Italy and Spain • Most worrisome is declining growth in Germany, which has been Europe’s growth engine Source: EuroStat and Kantar Retail European Economies: Inflation-Adjusted GDP Qtr-to-Qtr Growth, Seasonally-Adjusted Annualized Rate 2012.2 2012.3 2012.4 3.9% 1.1% 0.9% 0.6% -0.4% -1.1%-1.4% -2.3% Germany -0.8% -1.0% -3.0% France United Kingdom -1.5%-1.3% -3.7% Italy -3.1% Spain © Copyright 2013 Kantar Retail 5 European Markets: Distinct Retail Sales Trends Steepening declines in Spain, Italy; Others hold at weak pace • Germany retail sales regained some ground • Stronger shopper pullback in Spain and Italy • Elevated inflation contributes to relatively stronger growth in U.K. • France holding at a weak pace European Economies: Nominal Retail Sales Year-to-Year Percent Change; Not Adjusted for Inflation 6% 5% 4% 3% 2% 1% 0% -1%Mar-11 -2% -3% -4% -5% -6% -7% -8% United Kingdom France Germany Mar-12 Italy Spain * Through February, except Italy is through December and German/France through Jan. © Copyright 2013 Kantar Retail Source: EuroStat, Japan National Statistics Center, National Bureau of Statistics of China, U.S. Department of Labor 6 European Markets: Price Inflation Mostly Easing Elevated inflation in Spain and U.K. is a concern • Elevated inflation in Spain and U.K. means that their retail sales are even weaker in unit volume terms European Economies: Consumer Price Inflation Year-to-Year Percent Change, Through February 6% 5% United Kingdom Italy 4% 3% 2% Germany 1% • Unit demand 0% Mar-11 helped by price -1% letup in France, -2% Italy, and Germany -3% • Inflation may loom with easy money, weak currency Spain France Mar-12 -4% -5% © Copyright 2013 Kantar Retail Source: EuroStat, Japan National Statistics Center, National Bureau of Statistics of China, U.S. Department of Labor 7 European Markets: Core Price Pressure Mixed Excluding food/fuel, pressures most notable in Spain, U.K. • U.K. and Spain core inflation leveling off but still elevated • Core price pressures mixed in Germany, Italy • France on a clear easing trend since mid-2012 European Economies: Consumer Price Inflation Year-to-Year Percent Change, Through February 6% 5% 4% 3% Italy United Kingdom Spain 2% 1% 0% Mar-11 -1% Germany France Mar-12 -2% -3% -4% -5% © Copyright 2013 Kantar Retail Source: EuroStat, Japan National Statistics Center, National Bureau of Statistics of China, U.S. Department of Labor 8 European Markets: Confidence Metrics Diverge Germany somewhat less negative in consumer outlook ... • … as confidence improves some • France and Italy holding at very weak levels • Confidence has downshifted in Spain in past year • U.K. confidence has shown some resilience in face of austerity European Economies: Consumer Confidence Indices Through November 15 5 -5Mar-11 -15 -25 -35 -45 Mar-12 Germany United Kingdom Spain France Italy -55 © Copyright 2013 Kantar Retail Source: EuroStat, Japan National Statistics Center, National Bureau of Statistics of China, U.S. Department of Labor 9 Current Retail Conditions: France, Germany, U.K. Largest European Economies: Selected Indicators • Consumer spending is weak but positive in France, Germany and U.K. 1 • Easing inflation is propping up unitdemand in these countries; food in U.K an exception • Declining investment an ominous sign for their job markets 1 A three-month moving average is used to smooth out volatility in consumer confidence and retail sales Q4 2012 or Latest Available Month █ = IMPROVING █ = MIXED █ = WORSENING United Kingdom 2 GDP (Inflation-Adjusted), Annualized Growth Rate Residential & Business Investment (Inflation-Adjusted) Consumer Spending (Inflation-Adjusted) Retail Sales Excluding Auto & Fuel Channels 1 Consumer Confidence (Points) 1 CPI Headline Index, Not Seasonally Adjusted (NSA) CPI Food Index, Not Seasonally Adjusted (NSA) CPI Core Index, excluding food and fuel (NSA) Period Y-to-Y Q4 '12 Q4 '12 Q4 '12 Feb-13 Feb-13 Jan-13 Jan-13 Jan-13 0.3% 1.7% 1.3% 2.2% 6.8 2.7% 5.4% 2.1% Period Y-to-Y Q4 '12 Q4 '12 Q4 '12 Jan-13 Feb-13 Feb-13 Feb-13 Feb-13 0.4% -3.9% 0.4% 1.5% -7.2 1.8% 2.5% 1.3% Period Y-to-Y Q4 '12 Q4 '12 Q4 '12 Jan-13 Feb-13 Feb-13 Feb-13 Feb-13 -0.3% -2.2% 0.4% 1.2% 0.0 1.2% 2.2% 0.7% Germany GDP (Inflation-Adjusted), Annualized Growth Rate Residential & Business Investment (Inflation-Adjusted) Consumer Spending (Inflation-Adjusted) Retail Sales Excluding Auto & Fuel Channels 1 Consumer Confidence (Points) 1 CPI Headline Index, Not Seasonally Adjusted (NSA) CPI Food Index, Not Seasonally Adjusted (NSA) CPI Core Index, excluding food and fuel (NSA) France GDP (Inflation-Adjusted), Annualized Growth Rate Residential & Business Investment (Inflation-Adjusted) Consumer Spending (Inflation-Adjusted) Retail Sales Excluding Auto & Fuel Channels 1 Consumer Confidence (Points) 1 CPI Headline Index, Not Seasonally Adjusted (NSA) CPI Food Index, Not Seasonally Adjusted (NSA) CPI Core Index, excluding food and fuel (NSA) Source: EuroStat, UK National Statistics, Spain National Institute of Statistics and Kantar Retail Growth Q-to-Q or Chg Chg Q-to-Q M-to-M Y-to-Y or M-to-M -1.0% 0.0% -4.9% -1.4% 0.1% 0.9% 0.5% -0.1% -0.1% 0.4% 0.3% 0.4% 1.8 2.1 1.0 -0.5% 0.0% -1.0% 1.3% 1.1% 0.7% -0.9% -0.2% -1.0% Growth Q-to-Q or Chg Chg Q-to-Q M-to-M Y-to-Y or M-to-M -2.3% -0.5% -3.3% -2.8% -1.5% -1.4% 0.3% 0.4% 0.3% 0.8% 1.1% 1.6% 0.6 0.1 0.6 0.8% -0.1% 1.5% 0.0% -1.1% -0.6% 0.8% 0.2% 2.3% Growth Q-to-Q or Chg Chg Q-to-Q M-to-M Y-to-Y or M-to-M -1.1% -0.3% -1.7% -4.0% -2.4% -2.1% 0.8% 0.3% -0.3% 0.0% 0.0% 0.1% 0.6 0.6 0.5 0.3% -0.2% 0.9% 0.1% -0.4% 0.1% 0.2% -0.1% 1.3% © Copyright 2013 Kantar Retail 10 Current Retail Conditions: Italy, Spain Largest European Economies: Selected Indicators • One positive sign is inflation trends in Italy 1 • Otherwise, the indicators are overwhelmingly negative for both countries • Consumer demand in Spain further hurt by elevated inflation in addition to escalating unemployment Q4 2012 or Latest Available Month █ = IMPROVING █ = MIXED █ = WORSENING Spain 2 GDP (Inflation-Adjusted), Annualized Growth Rate Residential & Business Investment (Inflation-Adjusted) Consumer Spending (Inflation-Adjusted) Retail Sales Excluding Auto & Fuel Channels 1 Consumer Confidence (Points) 1 CPI Headline Index, Not Seasonally Adjusted (NSA) CPI Food Index, Not Seasonally Adjusted (NSA) CPI Core Index, excluding food and fuel (NSA) Period Y-to-Y Q4 '12 Q4 '12 Q4 '12 Dec-12 Feb-13 Feb-13 Feb-13 Feb-13 -1.9% -10.3% -3.0% -6.4% -21.1 2.9% 3.5% 2.1% Period Y-to-Y Q4 '12 Q4 '12 Q4 '12 Dec-12 Feb-13 Feb-13 Feb-13 Feb-13 -2.8% -7.6% -4.4% -2.9% -6.1 2.0% 2.3% 1.4% Italy GDP (Inflation-Adjusted), Annualized Growth Rate* Residential & Business Investment (Inflation-Adjusted) Consumer Spending (Inflation-Adjusted) Retail Sales Excluding Auto & Fuel Channels 1 Consumer Confidence (Points) 1 CPI Headline Index, Not Seasonally Adjusted (NSA) CPI Food Index, Not Seasonally Adjusted (NSA) CPI Core Index, excluding food and fuel (NSA) Growth Q-to-Q or Chg Chg Q-to-Q M-to-M Y-to-Y or M-to-M -3.1% -0.3% -1.8% -14.5% -0.6% -9.6% -7.6% -0.9% -5.5% 8.9% 0.7% 11.0% 1.1 -1.6 2.2 0.1% 0.1% 1.9% -0.2% -0.3% -0.9% -0.1% 0.1% 2.9% Growth Q-to-Q or Chg Chg Q-to-Q M-to-M Y-to-Y or M-to-M -3.7% -0.1% -2.9% -4.8% 0.9% -0.2% -2.5% 0.4% 1.9% -0.5% -0.1% 0.1% -0.1 1.2 -0.4 -0.2% -0.4% 1.8% 0.0% -0.7% -0.7% -0.4% -0.4% 2.8% 1 A three-month moving average is used to smooth out volatility in consumer confidence and retail sales 2 Consumer spending (inflation-adjusted) is estimated by Kantar Retail Y-to-Y = Year-over-Year change; Q-to-Q = change from prior quarter; M-to-M = change from prior month. Chg Y-to-Y = rate of Year-over-Year change in percentage points; Same for quarterly and monthly growth. All data is seasonally adjusted unless indicated by "NSA" or Not Seasonally Adjusted Source: EuroStat, UK National Statistics, Spain National Institute of Statistics and Kantar Retail © Copyright 2013 Kantar Retail 11 Frank Badillo Senior Economist Doug Hermanson Economist KRIQ T: +614.355.4019 F: +614.355.4059 T: +614.355.4044 F: +614.355.4059 245 First Street www.KantarRetailiq.com Floor 10 F +1 617 Insights 499 2723 Cambridge, MA website: Macroeconomics www.KantarRetailiq.com 02142 Topics & Trends > Macroeconomics © Copyright 2013 Kantar Retail