Sei sulla pagina 1di 28

ConsumerScope

Newsletter – Autumn 2006

Issue 3/2006

Modern fairy tales are hard work


“Germany: A Summer Fairy Tale” is the name Sönke Wortmann gave to his documen-
tary film on the German national soccer team and the World Cup held in this country.
That sounds buoyant and light and not at all strenuous. In reality, though, such fairy
tales are the result of hard work, and this applies in a similar way to the nonfood
categories. The forward passes delivered by FIFA with the World Cup and the minis-
ter of finance with the increase in the value-added tax have to be accurately convert-
ed by manufacturers and retailers in the remaining months. Then, at the end of the
year 2006 the result might read 1:0 for nonfood – one percent more than last year!

Thanks to favorable conditions, nonfood value is no good. Thus manufacturers and retailers
sales grew in the first half of 2006 for the first have not simply relied upon others to create a
time in seven lean years. Retail value sales of favorable environment but have also worked
nonfood items (textiles, electro, hard goods on their own fitness. In the first half of 2006
and building supplies ranges) at half-time lay the deterioration in prices in the retail trade
one-percent above the corresponding value has to a large extent been brought to a stand-
from the previous year. And as has been dem- still, even in the categories in which for years
onstrated in the meantime, not only were the merchandise has been becoming ever cheaper.
German kickers caught up in this enthusiasm
but German consumers as well. As a result, GfK At the same time, consumers have given up
ConsumerScope expects growth of one percent their reticence to purchase. The long since
for the entire year 2006 as well. agreed upon increase in the value-added tax
to 19 percent effective January 1, 2007, has led
Modern fairy tales are hard work, and the best to the consequence that a great many house-
“frame” is worth nothing if the picture within holds that have planned for a long time to

Development of nonfood demand


First plus after seven lean years

Nonfood turnover* Forecast

171,3 172,7
169,3 169,1
163,2

152,0
149,5 147,6 147,5
146,1

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
+1,0%

* Nonfood: Electro / textiles / hard goods incl. DIY

GfK ConsumerScope © GfK Panel Services Deutschland

1
ConsumerScope
Newsletter – Autumn 2006

make acquisitions and modernize have decided ■ Nonfood product ranges:


to do so in advance – inspired also by the cor- A slight lead at half-time
responding advertising measures of manufac-
turers and retailers. That has had an effect on The leader in the growth ranking was the seg-
the purchase of major electrical appliances, for ment electro, which in the first half of 2006
example, but also on renovation activities. You was able to increase its value sales by 5.4 per-
will find more details on these topics in the cent. The soccer world championship intensi-
GfK Electro*Scope and GfK Living segments of fied customers’ yearning for consumer elec-
this newsletter. tronics. Along with modern television sets, for
which the consumer must still pay a hefty
In the first six months of the year 2006, 34.3 price, DVD recorders were in great demand.
million households have gone shopping at For details on developments in the market for
least once in the stores of nonfood retailers. consumer electronics equipment turn to the
That is more than 200 thousand and 300 thou- third part of this newsletter, GfK Electro*Scope.
sand more than in the first half of 2005 and
2004 respectively. The average purchasing fre- Besides consumer electronics, major domestic
quency per customer increased slightly, but in appliances contributed decisively to the
return consumers spent somewhat less money growth in value sales. Higher demand (ad-
on their purchases (minus 0.2% compared to vance purchases) and higher prices gave rise to
the same period of the previous year). The to- an increase in value sales of 10 percent in the
tal result for nonfood in the first half of 2006 first half of 2006. On the other hand, growth
was an increase in value sales of just under 72 in the area of small domestic appliances con-
billion euros (+1%). However, the contribution tinued to flatten out. Nevertheless, there was
of the individual nonfood product ranges dif- an increase in value sales (1.8%) with a simul-
fered considerably. taneous decrease in demand (volume: -1.5 %).

Higher market volume due to increased expenditures


Market development total nonfood market*; 1st half-year respectively

Expenditures in mill. € Number of buying households in mills.


2004 2005 2006 Chg. in % 2004 2005 2006

72,73 71,25 71,93 +1,0% 34,0 34,1 34,3 +0,6%

Change in avg. expenditures per purchase (index) Purchasing frequency per buying HH
2004 2005 2006 2004 2005 2006

100 36,3 35,9 36,1


- 0,2% +0,6%

99,5 99,3

* Gross expenditures / purchasing act private German households

GfK ConsumerScope © GfK Panel Services Deutschland

2
ConsumerScope
Newsletter – Autumn 2006

The largest segment in the nonfood market core categories in the building supplies market.
are the so-called hard goods, among which are The cold weather that prevailed well into June
included the non-electrical household furnish- in Germany took the pleasure out of working
ings. This area also benefited from the pent-up in the garden. When summer finally did arrive,
demand of the households. In particular, old punctually for the start of the World Cup,
furniture was replaced by new. In this case, be- watching soccer and celebrating took priority.
cause of the relatively high average investment The result: a drop in value sales of 8.8 percent
involved, the still “low” value-added tax makes in the building supplies core categories during
itself apparent. The advertising battles on the the first six months. In the second half of the
part of the competing furniture outlets took year things may well turn out differently.
care of the rest in arousing consumers’ willing-
ness to spend. The entire hard goods range at-
tained an increase in value sales of 3.1 percent. ■ Nonfood sales outlets:
Victory for convenience
In contrast to the two segments characterized
by strong growth, electro and hard goods, the The development among the product ranges
textile area declined somewhat in the first six finds its equivalent on the retail side: among
months of the current year. In terms of value the winners in terms of value sales in the first
sales textiles stagnated with an increase of just half of 2006 were the furniture stores and the
0.6 percent. But here too it is encouraging to electronics specialty stores, but also the textile
see that consumers’ bargain-hunting orienta- department stores, contrary to the trend in the
tion has diminished so that the price deteriora- narrowly-defined range.
tion of the past several years could be stopped
(at least for the time-being). Whereas the large department stores and the
discounters stagnated, the rest of the retail
Badly hit in the first half of the year were the food trade was able to improve distinctly –

Development of nonfood value sales by segment


Market development total nonfood market

1st half-year respectively 2004 2005 2006 Chg. 2006 : 2005 in %

Total expenditures in bill. € 72,73 71,25 71,93


+1,0

Textiles 28,7% 28,3% 28,2% +0,6

Electro 19,8% 19,4% 20,3% +5,4


Hard goods
36,7% 36,5% 37,3% +3,1
Building supplies
core categories 14,8% 15,8% 14,2% -8,8 -0,4

GfK ConsumerScope © GfK Panel Services Deutschland

3
ConsumerScope
Newsletter – Autumn 2006

E-Commerce: Dynamically growing market


E-Commerce development of value sales

in bill. Euros 2002 2003 2004 2005 2006

12,96
+ 16 %
11,20 compared to
half-year period
previous year

E-Commerce value sales 8,84


in total year 7,23
6,35 6,24
5,32
of which in each 3,85
respective half-year
2,54

GfK Web*Scope © GfK Panel Services Deutschland

even though at a comparatively low level. An With rising fuel prices the tendency to make
essential part of that development can be as- purchases from the comfort of one’s own home
cribed to the coffee roaster Tchibo, which fur- also increased. German consumers bought 16
ther increased the number of its sales outlets percent more merchandise by internet mail-or-
in the retail food trade. This adversely affects der in the first half of 2006 compared to 2005 –
the remaining specialty shops, whose share of a rate of increase stationary retailers can only
the total nonfood market has declined by dream of, as a rule. Nevertheless, at present 85
more than three percentage points within the percent of all nonfood purchases are still made
last two years, but they suffer even more from in stores and a further eight percent by tradi-
the attractive force exerted by the large spe- tional mail-order, that is, ordering by letter, fax
cialty stores. or telephone.

E-Commerce: Growth at the cost of other sales channels


Value sales shares in percent

Each 1st half-year respectively 2004 2005 2006

Internet 5 6 7

Mail-order business 7 6 6
(without internet)

Stationary trade

88 88 87

Total nonfood in bill. € * 72,73 71,25 71,93

GfK ConsumerScope * Textiles, hard goods, electro © GfK Panel Services Deutschland

4
ConsumerScope
Newsletter – Autumn 2006

■ Nonfood purchaser groups: these categories, in contrast to food and most


Middle strong in demand beverages, the value-added tax of 19% will
then apply.
And anyhow, not all groups in the population
contributed to the same degree to the improved Among new-car registrations, too, the menac-
development in value sales. In the first half of ing increase in the value-added tax is leading
2006 consumers between the ages of 30 and 49 to advance purchases, especially since car deal-
in particular were the ones who made purchases erships are enticing customers by “waiving”
and exhibited above average spending behavior. this increase or even the value-added tax com-
In comparison, older households have either less pletely. In this way the customer can save at
need or they are more concerned about the de- least a couple of hundred or sometimes even a
velopment of their own (old-age) income. couple of thousand euros. It is therefore no
Younger households, on the other hand, are wonder that the branch is writing figures in
more satisfied with low-priced items and are still the black. By the end of August a plus in regis-
postponing the really large purchases. trations of one percent had accumulated, ac-
cording to the automobile industry association
on its homepage. At first glance that doesn’t
■ Other markets: Boom in demand seem like much, but a few more percentage
for consumer goods points could follow during the rest of the year.

The markets for consumer goods – that is, In the tourism branch the balance-sheet for
food, beverages, and drugs and cosmetics – ac- the 2006 summer season has not yet been pre-
cording to the GfK Consumer Index have been pared. For one thing, the World Cup of soccer
showing a stable positive trend since the be- in their own country kept many fans (and non-
ginning of the year 2006. At the end of August fan family members) from leaving Germany.
the increase in value sales was a good four per- This led to a short-term backlog of demand.
cent higher than for the comparable period of On top of that, the weather in August was less
the previous year. Actually, after the boom ex- than ideal so that many Germans were driven
perienced by certain categories surrounding to warmer climes. We will analyze the situation
the World Cup of soccer and in view of the in the coming weeks and keep you up-to-date
“escape from the republic” by the vacation-ad- in the GfK TravelScope.
dicted in August, one might have expected
more modest growth. But happy consumers in
this month again spent almost six percent ■ Preview: The most successful
more on purchases of fast-moving consumer year in a long time
goods.
In the last several months the experts have had
The most important driving force behind to constantly revise their forecasts regarding
growth in this case are beverages – certainly: economic development in Germany upward,
watching soccer in the sun makes one twice as towards the increasingly positive. Just recently,
thirsty. In the categories cosmetics, paper prod- for example, the IMF raised its forecast for Ger-
ucts, and laundry, washing and cleaning prod- many to 2.0 percentage points – that is 0.7
ucts, however, succeeded in putting through points more than estimated in the spring. If
real price increases in anticipation of 2007. For one considers that the prognoses for the USA,

5
ConsumerScope
Newsletter – Autumn 2006

Japan and important EU countries are even It is equally clear, however, that there are facts
better, then it becomes clear that an important and moods that could have negative effects.
thrust for the German economy comes from There is still the trend in energy costs, to name
the development of the world economy. How- one factor, even if the situation on the oil mar-
ever, that shouldn’t detract from the contribu- ket has grown visibly less tense, and the heating
tion being made by domestic demand. bill will not turn out to be as high as was once
feared – it is still high enough as it is. Costs for
According to the GfK Consumption Climate mobility are also distinctly higher than they were
Study in September 2006 consumers’ inclination a year ago. High gasoline prices, however, de-
to purchase reached an all-time high for the monstrably affect consumers shopping behavior.
third time already. With the certain expectation
of additional burdens, consumers have appar- But above all the debate on the future of old-
ently decided to seek refuge in attack. That age pensions and medical insurance could influ-
should lead to lively demand in most of the ence the desire to consume. Because, although
nonfood segments for the remainder of the politicians have not exactly demonstrated the
year. How things look after that is difficult to mastery of leadership skills in this regard the di-
estimate since households’ expectations with re- rection is clear: things will be more expensive
gard to both the economic outlook and their for everyone. And it is also clear: every euro
own income are not particularly optimistic. that is put aside (or has to be put aside) is with-
drawn from current consumption.
Nevertheless, one can describe the economic
trend in Germany as one of “robust growth,” Just what volume this displacement of expendi-
as most of the experts are doing. The increase tures might possibly have can be seen by look-
in the value-added tax may slow down the up- ing at the advertising activities of the insurance
ward trend briefly, but it won’t stop it. Objec- branch which the GfK DirectMail Panel has
tive factors like the slow decline in unemploy- been following with interest: from January to
ment and the increase in job openings confirm July 2006 the insurance branch sent 31 percent
the trend. The confluence with “soft” factors more advertising mail than in the correspond-
like confidence and optimism (“We Germans ing period of the previous year. For products in
have shown at the World Cup just what we are the area of private medical insurance (includ-
capable of accomplishing …”) has already led ing costs for dental prostheses) the growth in
to a distinct waning of the “It’s-cool-to-be- mailings at 47 percent was even higher. That
stingy” wave combined with a visible turn to- politicians should soon “get with the program”
wards more quality. In the food sector every in this regard would not only be in the inter-
new scandal leads to the reinforcement and ests of consumers but also equally good for the
acceleration of this trend. Thanks to spoiled development of the domestic economy.
meat!?

Contact: Dr. Wolfgang Adlwarth Contact: Herbert Lechner (Trade)


Phone: ++49 (0) 911 / 395-3664 Phone: ++49 (0) 911 / 395-3668
Fax: ++49 (0) 911 / 395-4092 Fax: ++49 (0) 911 / 395-4433
E-Mail: wolfgang.adlwarth@gfk.com E-Mail: herbert.lechner@gfk.com

6
Media*Scope
Newsletter – Autumn 2006

Issue 3/2006

Media are “offside”


Media offer a diversion from everyday life; that applies to books as well as to PC
games. If, however, “real” life itself holds an excess of distraction in readiness
then media will find it difficult to compete. Take the early summer of 2006, for
example, that enticed people into the open air with its fantastic weather. And on
top of that there was fantastic soccer for millions of fans. The ball was the
“medium” this time around, in the stadiums and in the sky.

The GfK Media Budget declined by five per- Of decisive importance for the relatively
cent in terms of volume sales in the first six “good” balance-sheet in terms of value sales,
months of 2006 compared to the correspond- compared to volume sales, for the first half of
ing period of the previous year. But although 2006 is the slightly positive value sales trend in
consumers bought less they paid slightly high- the book market. Books, despite declining mar-
er prices on average so that the decrease in ket shares in the last few years, still contribute
value sales at two percent was noticeably more more than a third to the GfK Media Budget
moderate. (basis: value). The development at movie-theat-
er box-offices also has a stabilizing effect. The
Naturally it is never pleasant when sales shrink, contribution of commercial downloads is opti-
but maybe it is some consolation for media cally impressive, but the market share of this
suppliers that most of the losses resulted from segment amounts to just under two percent
the first quarter of 2006. What is more, sales in and therefore the actual contributions to
this quarter in the previous year were particu- growth are rather negligible. The same applies,
larly strong so that the resulting massive basis by the way, the other way round for the area of
effect in this year has a mathematically nega- mobile phone content. With a market share of
tive influence on the media markets. two percent, a drop in value sales of 20 percent
has a limited effect on the total media budget.

GfK Media Budget: Gains and losses by market


January – June 2006 : 2005

Change compared to previous year’s period in % Volume Value


Commercial downloads 32 31
Movies 8 9
Books -2 1
Music* -5 -3
Entertainment software -3 -4
Video sales (VHS+DVD) -7 -10
Blanks (CD blanks / blank cassettes) -7 -11
Video rentals (VHS+DVD) -11 -13
Mobile content -23 -20
Total -5 -2
* Music videos are registered as “music.”
GfK Media*Scope © GfK Panel Services Deutschland

7
Media*Scope
Newsletter – Autumn 2006

■ Mobile content: The playful rise corresponding period of the previous year. Of
of games for mobile phones the just under 12 million music downloads
about 90 percent are track downloads, i.e. sin-
Let us stay for the moment with the taillight of gle music pieces, and only 10 percent are en-
the GfK Media Budget. The market for content tire albums.
that can be loaded onto mobile telephones
continues its downward trend. The minus in Of course, software still accounts for the larg-
value sales in the first half of 2006 amounted est share of value sales in the commercial down-
to 20 percent compared to the same period of load market. One reason for that are the much
the previous year. Nevertheless the decline higher average prices in this segment. Whereas
slowed down distinctly in the second quarter. a software download swallowed up on average
Ring tones still account for the lion’s share of about 29 euros, a music download (incl. album
contents downloaded to cell phones, but also downloads) cost an average 1.82 euro.
the downloading of entire music pieces, so-
called full track mobile music, is becoming The new ways of marketing music in the form
more and more popular. In the meantime of downloads and full track mobile music ac-
these downloads account for about five per- counted for about six percent of total value
cent of the total value sales of mobile content. sales in the music market in the first six months
of the year 2006. Although the segment is still
Despite heavy losses in the total market the out- comparatively small, it has already repeatedly
look is not so dismal in all segments. The winners proved to be a mainstay for the total music
in the market for mobile content, along with the market. Including downloads, in the first half
download of entire musical pieces as already year the music market sustained losses of
mentioned, are the games for mobile phones. “only” two percent in terms of value; without
They have enjoyed a peak season not only at the downloads, however, three percent. With this
Leipzig Games Convention. In the meantime eve- change, after the first six months the “physical”
ry third download to a mobile phone is a game. music market (without downloads) lies below
In this case, male players continue to dominate the level of value sales of the previous year.
with almost 60 percent, whereas when it comes While sales of music DVD’s in the current year
to ring tones women call the tune with 58 per- are stable, volume and value sales of CD’s
cent. When the question is how best to down- lagged behind last year’s figures by about four
load a game to a mobile phone, WAP technolo- percent.
gy plays a great role. 70 percent of all mobile
phone games are ordered through WAP.
■ Entertainment software:
Handhelds fascinate consumers
■ Commercial downloads: Music
adopts jaunty tones Just in time for the Games Convention in Leip-
zig (August 24 to 27), Europe’s largest exhibi-
Never before has the downloading of music to tion of computer and video games, GfK Panel
PC’s been more popular! Value sales of music Services had some good news to report: the
from the internet rose in the first half of 2006 market for electronic games grew in the first
by 37% to 21 million euros compared to the six months of the year 2006 compared to the

8
Media*Scope
Newsletter – Autumn 2006

same period of the previous year by 5.9 per- sales. Among the target groups 40 years and
cent in terms of volume sales to 19.7 million older, spending on DVD’s are still stable or
units sold (2005: 19.1 million). Because, howev- even increasing; among the younger age
er, the average price dropped from 24.43 euros groups, however, a declining tendency cannot
to 23.86 euros, value sales in this period of be overlooked.
time grew by only one percent to 468.9 million
euros (2005: 466.5 million euros). Among other things this may have something
to do with the most crucial segment of the
Of course, the market for electronic games is market: the marketing of current films. Be-
split, and the two partial markets in the first cause of the weakness of the cinematic year
half of 2006 again developed in opposite di- 2005 heavy losses were incurred in the first
rections. While PC games sustained losses half of this year. On the other hand, the spe-
amounting to 6.7 percent (down to 219.3 mil- cial interest and TV areas were able to increase
lion euros) compared to the previous year’s sales. The TV area in the meantime accounts
value sales (first half-year), video games for just under one-fifth of DVD value sales.
(games for consoles and handhelds) increased
sales by 7.8 percent (to 249.6 million euros). In Prices are falling everywhere. This is most evi-
this case the software products for the new dent in the segment of new releases. Never-
handhelds (Nintendo DS, Sony PSP) were par- theless, there is reason to hope for a distinct
ticularly instrumental in lending wings to the revival in the second half of the year especially
market. in the segment of current movies on DVD. Af-
ter all, DVD’s under the Christmas tree are be-
This positive environment notwithstanding, coming more and more popular.
that the total market is still on the minus side
with three percent (volume) and four percent To an even greater extent than the video sales
(value) is due to the non-games products. In market, the rental market is dependent on ti-
the first six months of the year 2006 value tles that are strong at the box-office. For that
sales decreased by 17 percent and volume sales reason, the rental market has suffered more
by 19 percent. The info and edutainment prod- highly than average in the first half of the year
ucts with 49 percent account for the largest from the weakness of the films on offer from
share of the non-games market, followed by the year 2005. In addition the lovely summer
application software with 42 percent and op- weather and of course the soccer World Cup
erating systems with nine percent. affected the video rental business negatively.

The market for recording media is character-


■ Video markets suffer from a weak ized by the “extinction” of the traditional
(previous) year at the movies blank media (audio and video blank cassettes,
minidisks). In the area of the “new” storage
For the first time since the introduction of the media (CD and DVD blanks), the successive
DVD, the trend on the DVD market was nega- changeover from CD to DVD blanks is becom-
tive. While volume sales in the first half of ing more and more apparent. DVD blanks are
2006 lay only slightly below the previous year, becoming increasingly attractive in terms of
the continuing decline in average prices gave price and already account for just under 40
rise to an even more distinct decrease in value percent of sales.

9
Media*Scope
Newsletter – Autumn 2006

■ The cinema market: After the ■ The book market:


ice age into the new age? “Kickoff” for the advice segment

Is the “ice age” in the German cinema market No other book project is planned and staged
finally coming to an end? “Ice Age 2 – The with such military precision as the publication
Meltdown” significantly enough is the name of a book on soccer after a World Cup. Just a
of the most successful film of the first six few hours after the final whistle of the final
months. But also “The Da Vinci Code” from game the printing machines are started up and
the novel by Dan Brown and the musical dra- just two days later the first books are in the
ma “Walk the Line” saw to it that German bookstores. The motto here is: only the fastest
movie theaters sold eight percent more tickets get the three points in this business.
and even had nine percent more turnover. Al-
together at the box-office in Germany in the And so it came to pass that a multitude of soc-
first half of 2006 64.6 million movie tickets cer books livened up the advice market in the
were sold accounting for 381.7 million euros in second quarter of 2006, although between the
value sales. final game and the end of the quarter lay an
interval of only three weeks. In the sub-cate-
That is a pleasant development after the signi- gory of sports books, books on the World Cup
ficant losses in the past (half) years. It doesn’t of soccer account for almost one-third of vol-
necessarily mean that German cinema is over ume sales. They are responsible for seeing to it
the hump, but in the film industry isn’t there that sports books increased sales by more than
an encouraging slogan that says: Dreaming is 50 percent.
allowed?
Propelled by the success of sports books, sales of
advice and utilitarian nonfiction books grew by
five percent compared to the corresponding peri-

Soccer World Cup: Powerful “kick” for sports books


1st Half 2006 : 2005

Sales in mill. euros

+52%

4,9

0,2

10,3 11,1
Books on soccer World Cup

Sports advice

GfK Media*Scope © GfK Panel Services Deutschland

10
Media*Scope
Newsletter – Autumn 2006

Book market continues positive trend


1st Half 2006 : 2005, Total book market

Total book market 1st half 2006 = 1.602 bill. €

Fiction

+ 4%
Other

+ 12%
Reference books
+ 1%
Atlases and travel
literature + 11% - 1% - 11% Scientific nonfiction

Classic travel guides* +5%


and coffee-table books
+ 5%
Children’s and
youth books Advice and
utilitarian nonfiction

GfK Media*Scope * incl. sports and active travel, hotel and restaurant guides © GfK Panel Services Deutschland

od of the previous year. That is quite a lot when the cash registers, whereas scientific nonfiction
one considers that for the past few years this books lost an almost equivalent amount (-11
segment has suffered greatly from the increas- percent). In this case the internet has grown
ing competition from the internet. Fortunately, into a mighty competitor.
however, in addition to the sports books, books
offering advice on health and body care as well The situation is completely different in the
as on the subjects of gardens, plants, nature realm of fiction. If need be, fiction is also in-
and animals were also more frequently bought creasingly bought via the internet. Electronic
in the first six months of the current year. books, however, have not caught on. On the
contrary, fiction has developed into a solid
As in the advice segment, children’s and youth mainstay of the book market. In the first six
books also grew by five percent in terms of months of 2006 consumers again spent four
value sales in the first half of 2006. Reference percent more money on literature, books that
works brought a good 12 percent more into the reader could also listen to, just for a change.

Strong growth in value sales for audiobooks


1st Half 2006 : 2005

Change in percent Shares in percent

Men 37
Volume sales + 5,7

Value sales + 16,7 63 Women

GfK Media*Scope © GfK Panel Services Deutschland

11
Media*Scope
Newsletter – Autumn 2006

Men prefer to order through the internet


1st Half 2006

Value shares in % Men Women

Bookstore
39 51

Book club

Department store
1
4
Mail-order business 13 2

6 10
Hypermarket / Supermarket / Discounter
14

Internet 28 3
13
Other outlets 9 7

GfK Media*Scope © GfK Panel Services Deutschland

A growing market in the large area of fiction As with fiction in general, audiobooks are
(43 percent market share of the total book bought primarily by women. They account for
market) and in the youth segment (12 percent almost two-thirds of all expenditures. Whereas
of total books) are the audiobooks. Over 90 per- women purchase every second audiobook in
cent of these books have literary content in the classic bookshops, men avail themselves of this
broadest sense. At four percent the share of sales channel for just under 40 percent of pur-
audiobooks on the total market is still relative- chases. On the other hand, more than twice as
ly small, but its growth is sustained and above many men (28 percent) as women (13 percent)
all valuable. While demand in the first half of buy their audiobooks on the internet. Both
2006 grew by just under six percent, value sales sales channels taken together thus account for
of audiobooks increased by 17 percent. some two-thirds of total audiobook turnover.

Contact: Christoph Freier Contact: Viola Löhle


(Music/video) (Mobile/download)
Phone: ++49 (0) 911 / 395-2257 Phone: ++49 (0) 911 / 395-3448
Fax: ++49 (0) 911 / 395-4022 Fax: ++49 (0) 911 / 395-4022
E-Mail: christoph.freier@gfk.com E-Mail: viola.loehle@gfk.com

Contact: Christoph Zeh Contact: Grit Patzig (Books/audio books/


(Games/software/cinema) calendar)
Phone: ++49 (0) 911 / 395-3359 Phone: ++49 (0) 911 / 395-3013
Fax: ++49 (0) 911 / 395-4022 Fax: ++49 (0) 911 / 395-4022
E-Mail: christoph.zeh@gfk.com E-Mail: grit.patzig@gfk.com

12
Electro*Scope
Newsletter – Autumn 2006

Issue 3/2006

Major appliances regain lost ground


Ten percent more turnover than in the previous year – something about which
others can only dream. But only at first glance is the great leap in value sales of
major domestic appliances in the first half of 2006 a dream result. Behind the
scenes a certain last-minute panic on the part of consumers and the increasing scar-
city of raw materials play a decisive role. Fortunately, manufacturers and retailers
have been able to integrate the higher costs (also those pending) at least in part
into the prices without throttling demand. This compensates for the bitter losses of
the past years.

Whoever looks with a little envy at the opulent under three percent of private German house-
increases in value sales of major domestic appli- holds have already bought major domestic ap-
ances should also, to be fair, cast a glance into pliances in advance of the coming increase in
the past. For five long years demand has been the value-added tax, or are planning to in the
declining constantly, and because prices were remaining months of the year 2006 (see chart
actually in free fall the balance-sheet in terms on the following page). It is true that a washing
of value sales looked even worse. Due to press- machine that can be bought today for 800 eu-
ing financial considerations and / or for fear of ros will only cost just under 20 euros more after
losing one’s job, many households have for a January 1, 2006, but the psychological effect is
long time been postponing new or replacement apparently stronger than the purely financial.
purchases of refrigerators and freezers, washing
machines and tumble dryers. Now they feel that It is also encouraging that consumers are
the right time has come to catch up on neces- following up on their intentions to purchase
sary or even unavoidable purchases. major domestic appliances by actually buying,
as the increase in volume sales amounting to a
The decisive argument for this position has good three percent underscores. That may not
been provided by the minister of finance. Just be the case in all product ranges. It is true, for

Development of demand for electric appliances


1st Half 2006 : 2005

Figures in % Volume Value

Small domestic
- 1,5 + 1,8
appliances*

8 major domestic
+ 3,3 + 10,0
appliances

* Incl. direct sales

GfK Electro*Scope © GfK Panel Services Deutschland

13
Electro*Scope
Newsletter – Autumn 2006

Influence of increase in value-added tax on intention to buy 2006


Households that have already made an advance purchase due to the increase in the
VAT or yet intend to in 2006 in the following product ranges

Shares in %

Renovations 9,7
Automobiles 6,1
Consumer electronics 5,5
Furniture 5,3
Automotive accessories 4,6
Computers / PC’s 4,1
Home textiles 4,1
Upholstered furniture 4,0
Mattresses 3,2
Built-in kitchen appliances 2,8
Other major domestic appliances 2,5
Bathroom fixtures 2,3
Household goods 1,8
Kitchen furniture 1,7
Electrical appliances household 1,4
Small domestic appliances kitchen 1,4
Electric devices personal care 1,2

Source: GfK ConsumerScope; survey of 14,000 panel households © GfK Panel Services Deutschland

example, that more value-added tax is saved value-added tax of the coming year already in
when purchasing an automobile, but the acqui- this year. Consumers are thus spared an abrupt
sition runs into considerably more money. And increase in price in January 2007, and suppliers
so it is that, according to the automobile indus- are spared the possibility that they will be sad-
try association, private car registrations as of dled with higher consumption taxes.
the end of August are up only one percent
compared to the corresponding figures of a The special demand situation makes it possible
year ago. With renovations, too, consumers to transfer the increased prices for raw materi-
have not as yet grabbed the initiative. To be als and the higher transportation and energy
more precise, almost 10 percent of households costs at least partially onto the fixed retail
do intend to carry out planned renovations in prices. The products are also made more expen-
advance, but in fact the core categories at sive not least by the fee for the disposal of old
building supplies stores have recorded value appliances. And so the prices for major domes-
sales that are almost nine percent minus as of tic appliances in the first half of 2006 have in-
the middle of 2006. In this case, too, there is a creased for the first time after having been
yawning gap between expectations and reality. more or less in free fall for the past several
years. For tumble dryers, dishwashers and elec-
Nevertheless, with the major domestic appli- tric ovens consumers currently have to put
ances there is a pleasantly large difference be- about as much money on the counter as they
tween a good trend in demand and an even did in the year 2002; washing machines on the
better one in value sales. Manufacturers and other hand still cost about as much as they did
retailers have managed in part to successively in the reference year. Only cooker hoods, as
incorporate into their prices the increase in the already previously, have benefited price-wise

14
Electro*Scope
Newsletter – Autumn 2006

Increasing orientation to quality / affinity to “leading” brands


1st Half 2006 : 2005, Top Boxes 6+7 (applies / applies fully and completely); shares in %

Question for buyers of major domestic appliances*: “Why did you ultimately decide in favor of the brand purchased?”

59 60 “This brand offers solid, reliable quality.”


56

28 30
“This brand is the leader 25
in this category.”

2004 2005 2006 1st half-year respectively 2004 2005 2006

* 6 major domestic appliances: washing machines, clothes dryers, dishwashers, refrigerators and freezers, electric stoves, stove filter hoods

GfK Electro*Scope © GfK Panel Services Deutschland

from technical improvements and lively de- ■ Small domestic appliances


mand. In general, fully developed technology come off worse than the majors
and qualitative aspects are increasingly playing
a role in the decision to purchase major domestic Consumers’ current focus on the necessary new
appliances. Because as a rule it is a question of and replacement purchase of major domestic
long-term purchases, consumers take more than appliances has relegated the small domestic ap-
just a favorable price into consideration. They pliances somewhat into the background. For
also pay attention to performance and quality. years now the technically demanding and func-
This has been shown by a survey conducted by tionally ever more sophisticated household
GfK among buyers of major domestic appliances. helpers lay ahead of their “big brothers”, but in
the first six months of the current year they
To the question of what ultimately was the de- couldn’t hold a candle to the major appliances.
cisive factor in favor of the brand purchased,
currently 60 percent of respondents stated Volume sales of small domestic appliances (in-
that quality was a decisive buying criterion. cluding direct sales) declined in the first half of
That’s four percentage points more than two 2006 compared to the corresponding period of
years ago. Thirty percent of purchasers decided the previous year by 1.5 percent. After the first
on a particular appliance because it was the quarter, demand still lay a good three percent
leading brand. The number of these brand above the previous year’s figure. Value sales,
buyers also increased by five percentage points on the other hand, were still on the plus side
in the two-year period. The so-called “A” in the first half of 2006 with 1.8 percent
brands like Miele, Bosch, Liebherr and others growth. However, even in terms of value sales,
are the ones that are especially in consumers’ the result for the first half of the year lay be-
good graces. All of these brands were able to hind that of the first quarter (+4.0%).
expand their market share, both in volume as
well as in value sales, in the first six months of The growth in value sales is distributed among
the current year. various segments and categories such as electric

15
Electro*Scope
Newsletter – Autumn 2006

Share of special offers of total small domestic appliances*


1st Half 2006 : 2005

Question for buyers of small domestic appliances: “Was this price a special offer?”

51 51
49 50 50

46
45
43
40

1997 1999 2001 2002 2003 2004 2005 2005 2006


1st Half 1st Half

* 25 small domestic appliances. Basis: Volume

GfK Electro*Scope © GfK Panel Services Deutschland

men’s shavers, electric toothbrushes and depila- ■ Digital cameras: More and more
tion devices (new products in the premium seg- often a search on the internet
ment) as well as hairstyling appliances, particu-
larly high-grade and comparatively high-priced The consumer is confronted with an ever-in-
hair straightening devices. But also coffee pad creasing variety of consumer electronics from
and espresso machines (fully automatic), again which to choose. New models are constantly
contributed to the growth in value sales. coming onto the market and the life cycles of
the devices are becoming shorter and shorter.
The higher emphasis on quality among consum-
ers across the board has also led among the In order to find the right product it is therefore
small domestic appliances to a strengthening of becoming more and more important for con-
the specialty trade. The volume sales market sumers to inform themselves thoroughly about
share of the specialty stores increased in the what is on the market before making a pur-
first half of the year 2006 compared to the cor- chase. The reverse is true also, that manufactur-
responding period of the previous year by 1.5 ers and retailers can optimize their marketing if
percentage points to 29.5 percent. The market they accommodate the specific information re-
share in terms of value sales rose to 42.9 per- quirements of the target groups Using digital
cent; that correlates to an increase of three per- cameras as an example, GfK Panel Services
centage points compared to 2005. Losers in the shows how young and old, man and woman
buyers’ estimation were above all the discount- differ in their information-seeking behavior.
ers, whose market share (volume) declined by
3.5 percentage points to 13.2 percent. Analo- Now as before the most important source of
gous to that development is the declining information before purchasing comes from
share of appliances that are bought at bargain poking around in the store. About 50 percent
prices. Nevertheless, it is still the case that only of buyers of digital cameras look intensively or
every second appliance is purchased for the very intensively (top boxes 6+7) at the cameras
regular price. being offered before the purchase and com-

16
Electro*Scope
Newsletter – Autumn 2006

Information-gathering behavior relating to purchase of digital cameras


Where did you inform yourself before buying your digital camera?
Top Boxes 6+7 (intensive / very intensive)

Share of sources of information in % Sex According to age group


m / f <35 35-44 45-54 55+

Product comparison in store 50 50 47 54 49 43 49

Internet 46 48 39 53 47 47 35

Advice from salesperson 46 45 42 40 44 39 51

Test reports 40 46 27 40 41 39 38

Relatives / friends 35 31 43 40 35 29 36

Advertisements / inserts newspapers 32 31 29 34 31 26 30

Manufacturers’ brochures 27 28 23 25 25 25 30

Advertisements / inserts magazines 25 25 23 24 27 20 24

Mail-order catalogues 16 17 15 16 17 15 15

Direct mail 8 9 5 8 8 6 8

TV and radio advertising 3 2 5 3 3 4 3

Customer service consultation 2 2 2 1 2 1 3

Quelle: GfK Electro*Scope © GfK Panel Services Deutschland

pare features and functions of the different ■ Vital markets, lucrative niches:
products. Study on electro-products 2006

The internet has gained significantly in impor- This year once again GfK Panel Services con-
tance and in the meantime has become the ducted a market study on various electronics
second most important source of information, products. The cutoff date was August 1st.
almost at the same level as the advice received Information was gathered on health and
from the salesperson. However, whereas the beauty care products and other electrical
internet is mainly used by young buyers and household appliances by way or a written
men as a source of information, older consum- survey of 15,000 households in Germany.
ers tend to rely more heavily on the advice re- The results are representative for all 34.3
ceived from sales personnel. million private households in Germany.

The reading of test reports occupies fourth On the one hand, the study provides infor-
place in the ranking of the most important mation on the degree of ownership among
sources of information before making a pur- the households, but it also contains other
chase, whereby this is distinctly more a special- relevant information such as:
ty of men than of women. For women, on the u Market volume 2005: 2006 (first half-year)
other hand, the opinion of relatives, acquaint- u Brand structure
ances and friends plays a greater role. About u Year of purchase
43 percent of women inform themselves in this u Sales outlet structure
way before they buy a digital camera.

17
Electro*Scope
Newsletter – Autumn 2006

u Average prices u The most important sales outlet in the


u Sociodemographic profiles of area of health and beauty care products
owning households, etc. in the past year was still the pharmacy,
particularly due to the demand for
This information can be helpful in answering blood-sugar measuring instruments and
the following questions relevant to market- inhalators. But discounters and coffee
ing: outlets occupied a relative important
u How strong are the individual brands? position. The medical supplies outlet as a
u How is the retail environment set up? source of supply with two percent lay at
u What prices are there on the market? the bottom of the standings.
u How can the target groups be described?
u Further questions
Categories in the study
The results from previous years show that u Electric steam cleaners
the markets surrounding health, beauty and u Weather stations / radio weather stations
wellness offer interesting niches for manu-
u Binoculars
facturers and retailers:
u Beer tap systems

u Electric bread bakers


u The undisputed number one among 13
selected product groups in 2005 was the u Charcoal / fireplace grills

bathroom scale, which is present in 25.5 u Gas grills


million households (market saturation: u Electric barbecue grills
75%). In second place were the fever u Hearing aids
thermometers of all types (market satu-
u Electric heart frequency measuring
ration: 64%), whereby the traditional
watches (pulse watches)
digital thermometer is especially wide-
spread. Under the Top 5 followed electri- u Electric step counters

cal massage devices (19.3%), devices for u Electric massage devices

manicures / pedicures (11.4%) and electric u Electric inhalators


inhalators (10%). u Electric steam therapy devices

u Electric whirlpool baths


u The market saturation for step counters
u Electric manicure / pedicure devices
(4.5%) and body fat measuring instru-
u Electric humidifiers
ments (1.9%) on the other hand is very
u Electric air conditioners
low. These devices are just beginning
their diffusion among households. u Body fat measuring instruments

u Bathroom skales

u Electric fireplaces

18
Electro*Scope
Newsletter – Autumn 2006

■ Consumer Study Eastern Europe The study also examines the sociodemographic
2006: Results now available structure of the owner households, how satis-
fied the consumers are with their appliances,
In January 2006 GfK Electro*Scope conducted how frequently they use them, and much more.
another consumer study on various electric ap-
pliance categories (small / major domestic appli- A part of the study relates to blood pressure
ances, consumer electronics) in nine eastern monitors and their distribution in eastern Eu-
European countries, namely: rope. While the level of ownership in Hungary
u Russia is already very high, in Russia, Poland and the
u Poland Czech Republic there is a considerable amount
u Czech Republic of accumulated demand. At the bottom of the
u Slovakia standings, in the Czech Republic, market satu-
u Hungary ration is just above 14 percent. One also finds
u Bulgaria big differences in model preference: whereas
u Romania consumers in Russia almost exclusively take the
u The Ukraine upper-arm models (91 %), the trend in Poland
u Croatia is moving towards the more user-friendly wrist
appliances (58 %).
The study collects data in more than 23,000
representatively selected households on levels In Poland, the preferred sales outlets for pur-
of ownership of electric appliances as well as chasing blood pressure monitors are similar to
the volume of private demand, and provides Germany: discounters and supermarkets are
information on, among other things: gaining increasingly in importance (volume
u Brands share: 44 %). One reason for this is the fact
u Types that the average prices in the last two years
u Sales outlets have fallen by more than half to 30 euros. In
u Retail prices Hungary, Russia and the Czech Republic,
u Purchase years though, when it comes to purchasing blood
u First / replacement / pressure monitors consumers tend to place
additional purchases, etc. their trust more in the specialty outlets (vol-
ume share for pharmacies in Russia: 71 %).

Blood pressure monitors in eastern Europe:


Market saturation and model shares
1st Half 2006 : 2005

Market saturation in % Model shares in %

Wrist model Upper-arm model

34,6 9

42 58
91
14,3

Hungary Czech Rep. Russia Poland

GfK Electro*Scope © GfK Panel Services Deutschland

19
Electro*Scope
Newsletter – Autumn 2006

■ Consumer Study u Target groups for different categories


Western Europe 2007 Sociodemographic profiles of owning
households, core target groups
GfK Panel Services is planning for January u Product features decisive for purchase
2007 (preceding study: 2003) another consu-
mer study on various major and small dome-
stic appliances in nine western European Categories covered:
countries (Germany, France, Spain, Italy, UK,
the Netherlands, Sweden, Switzerland, Aus- u Major domestic appliances:
tria). By way of a survey of 51,000 represen- Washing machines
tatively selected households the study will Tumble dryers
investigate the following topics: Dishwashers
u Ownership levels in the households Electric / gas ovens
u Purchases in the last two years Cooker hoods
u Brand and manufacturer Microwave ovens
u When was the appliance purchased? Refrigerators
u What product features played a role in Freezers
making the purchase?
u Satisfaction with the appliance, etc. u Small domestic appliances:
Coffee and espresso machines
The study will provide valuable marketing Vacuum cleaners of all types
information and answers to questions such Irons of all types
as the following: Electric oral care devices
u Where is there potential in the market? Bathroom scales
Market saturation, pent-up and replace- Blood pressure monitors
ment demand Electric tools
u How strong are the individual brands?
Positioning of individual brands in the
market and competitors’ positions

Contact: Göran Seil (Major domestic applian- Contact: Stefan Nigg (Consumer electronics,
ces and small domestic appliances) IT, telecommunications)
Phone: ++49 (0) 911 / 395-4403 Phone: ++49 (0) 911 / 395-3117
Fax: ++49 (0) 911 / 395-4022 Fax: ++49 (0) 911 / 395-4022
E-Mail: goeran.seil@gfk.com E-Mail: stefan.nigg@gfk.com

Contact: Uwe Broeske (MDA/SDA, national


and international ownership studies)
Phone: ++49 (0) 911 / 395-4214
Fax: ++49 (0) 911 / 395-4022
E-Mail: uwe.broeske@gfk.com

20
Living
Newsletter – Autumn 2006

Issue 3/2006

Jazzed up but not ritzy


German consumers are using the finance minister’s “tax present” as a reason to
revamp their household furnishings. Before the higher value-added tax in the coming
year makes purchases for home and garden more expensive (although not a must),
consumers are buying furniture in comparatively high volume. With the amount of
money spent, however, they are for the most part keeping their feet on the ground.

The market for furniture in Germany, after a definitely lower, which can be attributed to
long hard slog, has improved overall in the the numerous discount promotions with which
first half of 2006. The basis for that is the no- furniture is sold for throwaway prices. This ap-
ticeably improved consumption atmosphere plies particularly to the lower-priced furniture
among consumers and the propensity to con- categories such as small pieces of furniture or
sume that goes along with it, which, according baby / children’s furniture and youth furniture.
to the GfK Consumption Climate Index is cur- In this case, despite higher demand, expendi-
rently better than it has been in years. Ag- tures are distinctly on the minus side.
gressive advertising on the part of retailers
and advance effects due to the upcoming in- In general, consumers stocked up on furniture
crease in the value-added tax are taking care without at the same time investing in large
of the rest and contributing to considerable sets of furniture. Small pieces of furniture es-
growth in volume sales of furniture. pecially were purchased en masse at discount
prices without bringing decidedly more money
Compared to that, growth in expenditures is into retailers’ cash registers.

The furniture market in the first half of 2006


Basis: 20,000 households from the GfK Furniture Panel (in %)

Change in expenditures (value) of private households in the 1st half 2006 : 1st half 2005 in %

Bedroom + 2,0
Living room case furniture + 3,9
Upholstered furniture + 6,1

Baby / children’s / youth rooms - 8,0


Home office - 3,5
Garden furniture + 0,2
Dining room - 2,4
Small pieces of furniture - 5,9
Total market* + 1,7

www.gfk-living.com * without kitchen furniture © GfK Panel Services Deutschland

21
Living
Newsletter – Autumn 2006

■ The GfK FurniturePanel – ■ Kitchen market under pressure:


Not off-the-shelf information Old furnishings harbor enormous
potential
Within the framework of the GfK household
panel, 20,000 representatively selected Ger- The way things are in German kitchens are sim-
man households are surveyed on a monthly ilar to the way things are in German society:
basis on their monthly (furniture) purchases they are on the average very old – too old! Ac-
and reasons for purchasing as well as on cording to figures from the GfK KitchenPanel,
their information-gathering and buying be- kitchens in Germany reach an average age of
havior. This is accomplished using specific 18 years before they are replaced.
and detailed questionnaires for each sepa-
rate product range. Looked at from today’s perspective, the time
of purchase for a kitchen of average “age” lies
In that way, GfK Living is in a position to pro- in the ‘80s of the previous century. In some
ject all relevant market information – ranging cases it would appear as if they came from the
from market volume to demand development “middle ages”: over half of all kitchens that
to price information – for the total furniture were replaced by a new purchase a short time
market and for each individual product range. ago, were more than 15 years old; a third had
even been in service in the kitchen for longer
These valuable aids to decision-making are than 20 years.
available to furniture manufacturers and fur-
niture retailers, but also to subcontractors, in There is a world of difference both in the func-
four different performance packages. tionality and the design of a kitchen between
then and now. And so it is that the most fre-
Your GfK consultant would be happy to in- quent motive for the purchase of a new kitch-
form you of purchase options and costs in- en is for the replacement of old, used-up and
volved. You can also find further information more or less worn-out furniture. This reason
at www.gfk-living.com. was given by more than one-third of kitchen

The kitchen market 2006: Ownership of the household before purchase


1st Half 2006 : 2005

Did you have another kitchen Approx. how old was your previous kitchen?
before buying a new one?

10 up to 5 years
19 up to 10 years

Yes: 81 17
up to 15 years

22 up to 20 years

21 years and more


31
No: 19 1 no response

www.gfk-living.com © GfK Panel Services Deutschland

22
Living
Newsletter – Autumn 2006

The kitchen market 2006: Reasons for buying kitchen furniture


1st Half 2006 : 2005; basis: volume / value in %

What was the reason for buying your kitchen furniture?

Volume Replacement of old used-up / Value


(slightly) worn-out furniture

Move to another house /


another apartment (own home)
30
36
Move to another house /
another apartment (rental)

Replacement of old furniture


18
(for newer design)

Supplement existing furnishings 22

23
Establishment of household / furni- 13
10 shing one’s own first apartment
11
4 Present / addition to the family / 1
8 other reason 9
8 6
1 No response 1

www.gfk-living.com © GfK Panel Services Deutschland

buyers surveyed by GfK. A further 11 percent The fact that about half of all kitchens are re-
stated that they had purchased their kitchen placed because they are worn out or for rea-
for reasons of design. Just under one-quarter sons of design, and the high average age of
of all kitchens are bought in order to equip a German kitchens in general, harbors great po-
new home or condominium. That also possibly tential for turnover for the coming years. This
explains why 10 percent of all households enormous potential for replacement purchases
bought a new kitchen although the old one and renovations is just waiting to be awakened.
was not even five years old. What is more, in addition to kitchen furniture,

The kitchen market 2006: Electric appliances in the kitchen


1st Half 2006 : 2005; basis: volume in %

Which electric appliances did you acquire along with the kitchen?

Cooker hood 68
Electric oven 66
Dishwasher 58

Refrigerator 34
Refrigerator / freezer combination 27
Microwave oven 14
Freezer 7
Gas stove with gas / electric oven 2

www.gfk-living.com © GfK Panel Services Deutschland

23
Living
Newsletter – Autumn 2006

The kitchen market 2006: Deliberation before the purchase


1st Half 2006 : 2005

How much time lay between the first thought of buying a new kitchen and the actual purchase?

Volume Less than a month Value

1 month 12
19
9
14 2 months 12
12
3 – 6 months 22
19
7 – 12 months 11
10
More than a year 35
24
2 No response

www.gfk-living.com © GfK Panel Services Deutschland

in some two-thirds of all cases stove filter months pass before the households finally
hoods, electric stoves and dishwashers will also make up their minds to buy a new kitchen.
be bought.
In this connection, the higher the planned in-
In the meantime, overhasty kitchen purchases vestment, the more information the interested
have become seldom. Especially when it comes buyers gather in advance. Two-thirds of poten-
to purchasing a higher quality kitchen, it can tial customers go to up to three different
sometimes take up to a year before the buying stores and obtain offers with concrete price
decision is finally made. In actual fact, for calculations.
more than half of all purchases at least three

The kitchen market 2006: Number of stores visited with price quotation
1st Half 2006 : 2005

In how many stores did you have a price calculated for you on the basis of a personal consultation?

Volume 1 store Value

2 – 3 stores
19 20
4 – 5 stores
39
6 stores 47

11 No other store
1 12
No response 1
28 20
2

www.gfk-living.com © GfK Panel Services Deutschland

24
Living
Newsletter – Autumn 2006

■ Trend towards “better cooking” – units thereby almost reaching the same level
Higher quality cooking utensils of demand as the corresponding period of the
in demand previous year. The expenditure side was much
more pleasing: with about 183.7 million euros
The level of ownership of pots and pans for in the first half of 2006 value sales surpassed
cooking and frying in Germany is without a the previous year’s results by 2.2 percent.
doubt very high and for each culinary dish
cooks have their own special pots or their own The trend towards products of higher quality is
particular pans. In the strong cooking utensils apparent in all market segments. For this reason
categories “pots and pans” the market is with- the development of value sales in the first half
out a doubt on the upswing. It is true that GfK of 2006 was generally better than volume devel-
Living is observing a decline in volume sales in opment, no matter whether demand in the re-
the pots category of the nonmetallic / micro- spective segment increased too or declined.
wave dishes sort, but the trend – as with the
other two categories as well – is moving clearly Metallic pots
in the direction of quality and thus to products Demand among private German households in
of higher value. the first six months of the current year reached
a volume of just under 3.1 million items. That
In the first half of 2006 the total market corresponds to a plus of 1.4 percent compared
achieved volume sales of a good 7.6 million to the first half of 2005. With 87.0 million euros

Stove and cooking utensils market in Germany


Basis: volume / value

1st Half 2006 : 2005

Total stove and Nonmetallic pots/


Pots (metal) Pans Pressure cookers
cooking utensils microwave dishes

7,712 7,625
+ 1,4
+ 4,0
- 9,3
- 1,1 3,046 3,088
2,237 2,328 - 7,7
2,039 1,849
390 360

Value in mill. euros


Volume in mill. units

179,1 183,7 + 3,4


+ 5,1
+ 2,2 84,1 87,0 - 3,8
±0
51,2 53,8
17,8 26,0 25,0
17,8

2005 2006 2005 2006 2005 2006 2005 2006 2005 2006
1st half-year 1st half-year 1st half-year 1st half-year 1st half-year

Quelle: GfK Living © GfK Panel Services Deutschland

25
Living
Newsletter – Autumn 2006

consumer expenditures of the previous year’s corresponds to a nominal decrease of one mil-
period were surpassed by 3.4 percent. lion euros. In this case, too, average prices lay
distinctly above those of the previous year. In
Pans view of this trend one is justified in talking
The positive development in the pan market about an upswing in the market for cooking
was also encouraging. In the first half of 2006 utensils, especially for pots and pans. The most
consumers purchased a good 2.3 million pans. differing influencing factors – such as the con-
That is about four percent more than in the spicuously improved consumer mood and a rel-
first half of 2005. On the value side the market atively high propensity to purchase in view of
even booked a plus of a good five percent. the upcoming increase in the value-added tax
next year – should lend further wings to de-
Pots nonmetallic / microwave dishes mand in the second half-year. That would com-
With approximately 1.85 million units, private pensate manufacturers and retailers for the
demand lay about nine percent below that of losses of the past – the gift-giving period
the comparison period, but value sales with around Christmas especially should lead to in-
17.8 million euros reached the level of the pre- creased sales.
vious year. On balance this means: consumers
bought products of distinctly higher quality.
■ Sanitary facilities markets:
Pressure-cookers Relaxation under a “warm shower”
In the pressure-cooker segment, both pots and
pans, the comparison of the half-year periods For many years, the area of building and reno-
shows that volume sales dropped by 30,000 vations has not been pampered by the eco-
items to about 360 thousand units purchased (- nomic situation. But now, finally, the building
7.7%). In comparison, value sales of pressure- industry is sending positive signals for (build-
cookers declined by “only” 3.8 percent. That ing) business.

Sanitary fixtures markets 2006: Development of volume sales


1st Half 2006 : 2005

Rates of change in %

Fittings 2,5
Showers 2,4
Bathroom furniture 1,5
Toilet flushing systems 1,4
Washbasins 0,9
Bathtubs 0,8
Shower tubs 0,3
Toilet bowls 0,3
Shower partitions ±0
Total market 1,6

www.gfk-living.com © GfK Panel Services Deutschland

26
Living
Newsletter – Autumn 2006

Sanitary fixtures markets 2006: Development of value sales


1st Half 2006 : 2005

Rates of change in %

Fittings 8,2
Showers 5,5
Shower tubs 4,7
Washbasins 4,7
Toilet flushing systems 4,6
Bathroom furniture 2,7
Shower partitions - 0,9
Bathtubs - 5,5
Toilet bowls - 6,4
Total market 2,2

www.gfk-living.com © GfK Panel Services Deutschland

Although one can hear a slight sigh of relief in single segment finished the first six months
the sanitation branch, skepticism still domi- with losses in demand.
nates the picture. Sanitary fittings and showers
have suffered too much in the last years from As in the other GfK Living markets, in the sani-
the weak economy and hesitant demand. But tary area too value sales developed better
now, with the upswing in Germany gaining than volume sales. This does not apply to all
strength and consumers’ propensity to pur- market segments though.
chase downright euphoric, better times should
be ahead for sanitation products as well. And The list of top winners is longer for value sales
actually there are signs that most of the sani- than for volume sales. Out in front were the sani-
tary facilities markets in the first half of 2006 tary fittings which experienced an increase in val-
have already more or less recovered, especially ue sales of 8.2 percent since more brand-name
in terms of value sales. products were purchased and the discounters
didn’t have any promotions. Whereas the higher
In the first half of 2006, private German house- prices consumers paid saw to it that the winners
holds acquired a good 2.8 million new sanitary experienced growth, among bathtubs and toilet
fittings. In that connection, in terms of volume bowls discount promotions led to heavy losses.
growth sanitary fittings lie slightly ahead of
showers. Both markets were able to improve In the coming months it is safe to assume that
by about two and a half percent up till now in advance effects due to the increase in the value-
the current year compared to the correspond- added tax and the (limited) tax deductibility of
ing period of the previous year. But bathroom craftsmen’s invoices for private households will
furniture and toilet flushing systems as well as provide further stimulus to the sanitary facilities
washbasins and bathtubs also achieved re- markets. And the continuing wellness trend could
spectable volume growth at the level of the also contribute to making manufacturers and re-
total market or slightly lower. Fortunately, no tailers of sanitary fittings soon feel better again.

27
Living

Contact: Peter Bittner (heating, stove Contact: Oliver Schmitz (construction,


and cooking utensils, sanitary/ renovation, furnishing, DIY/
bathroom) garden, watches)
Phone: ++49 (0) 911 / 395-3665 Phone: ++49 (0) 911 / 395-4469
Fax: ++49 (0) 911 / 395-4092 Fax: ++49 (0) 911 / 395-5-4469
E-Mail: peter.bittner@gfk.com E-Mail: oliver.schmitz@gfk.com
Internet: www.gfk-living.com

28