In Germany, discounters dominate the tissue market. They offer mainly their
own retailer brands (private label including Aldi). That is one of the reasons
that the importance of private label is so high. Private Label (PL) is also
very important in drugstores, while in supermarkets/hypermarkets (small and
bigger hypermarkets) or mass merchandisers (big hypermarkets) private label's
share reaches up to 50%!
In 2008, before the beginning of the financial crisis, we had increasing
prices in the whole FMCG market (excluding fresh food). Discounters, in particular,
enjoyed the highest increases in 2008. Of course, this influenced the tissue
market too: price increases in the tissue retailer brands averaged 8% in 2008
compared to the previous year.
DOMINANT PRIVATE LABEL
Toilet tissue: In 2008 the value share for private label tissue was 78% for
toilet tissues and kitchen towels and 65% for paper handkerchiefs.
As shown in Figure 4, private label (including Aldi) is very important in
the German market. Nearly all German buying households (BHH) have bought toilet
tissues at least once from a private label or an Aldi brand. The brands reach
only half as many households (only four in 10). An average buying household
in Germany buys 80.1 rolls (-0.5% from previous year.) and spends €21.19/yr
for this category. This is 5.6 % more euros per household than in the previous
year. The higher spending is mainly driven by higher prices for private label
including Aldi. There was an 8% higher price per roll than the year before.
Kitchen towels: The penetration in Figure 5 shows that nearly eight in 10
German households bought kitchen towels at least once. Whereas seven in 10
households buy a retailer brand only three of 10 choose a branded product.
An average buying household in Germany buys 21.3 rolls (change rate -1.2%)
and spends €7.96/yr for this category. This is 4.9% more euros than in the
previous year. Above all, private label including Aldi is growing because of
the higher spending (€6.88/BHH in 2008).The higher spending is mainly driven
by higher prices. There also was an 8% higher price per roll than the year
before, the same as in the other tissuecategories.
Paper handkerchiefs: The penetration rate in Figure 6 shows that nearly eight
in 10 German households bought paper handkerchiefs at least once. An average
buying household in Germany buys 1259 tissues (-3.1%) and spends €8.64/yr for
this category. This is 0.4 % more than in the previous year. In this category,
brands are struggling because they lost buying households (-3.6%) and additionally
the spending per buying household decreased to €6.55 (-7.1%). Private label
including Aldi is growing because it is gaining buying households (+1%) and
also because of higher spending per household (+5.8%). The higher spending
is mainly driven by higher prices, as in the other tissue-categories. We also
had an 8% higher price per tissue than the year before.
CRISIS: RISKS AND REACTIONS
The crisis has hit consumers in different ways. Mainly it is a question of
the financial situation and how households are affected by the labour market.
GfK analyzed how big these different groups are and how important they are
in different product groups and their brands (Figure 7). Crisis-prone households
represent about one-fifth of all households. These households change their
purchasing behaviour because of unemployment or fear of job losses. Households
with a tight financial situation are not directly affected. But these households
could easily get in trouble if, for example, they need a new washing machine
or a sudden car repair. These are mostly families with children and pensioners
with a tight financial situation.
One reason why Germans still keep (relatively) calm is that nearly the half
of them are not affected. These households are resistant to crisis because
they are in a comfortable position (secure job or well-off pensioners).
How strongly a category or brand will be affected by the crisis depends on
how big is its share of crisis-prone households. The tissue categories show
us the same position as FMCG as a whole. That means about 20% of all tissues
are sold to households that may have to change their purchasing habits because
of their tight budget. And of course that could mean a big risk potential for
a brand in these market!
How much is the risk potential for your brand or segment? For more details
please contact GfK Panel Services in Germany.
TW
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Egon Schiebel is a Marketing Consultant with GfK SE
- Bereich Panel Services Deutschland, Sandweg 94, D-60316 Frankfurt,
Germany. Tel: +49-69- 5050929-74, Email: Egon.Schiebel@gfk.com |
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