Again we noticed a decline in non-food sales during the second quarter of 2016. The reasons behind this decline are difficult to determine. Although on macro-level, unemployment rate declined and disposable income increased, consumer spending didn’t grow within the non-food market. Geopolitical tensions, growing uncertainty since the Brussels airport terror attack and the unexpected Brexit referendum result are impacting on the economic climate. Furthermore, the Home Improvement and Fashion sector experienced a more direct negative impact because of bad weather conditions. This all led to a decline in sales value of -1.3% in the second quarter, compared to the same period last year. The comparison is based on the sum of all non-food markets measured by GfK POS Measurement.
Although the non-food market lost during the second quarter of 2016, several markets grew strongly during the last quarter.
There were the European Championships Football, which fulfilled the high expectations regarding television sales with a sales increase close to 25%. It was mainly the big 50 inch+ television screens that pushed the Consumer Electronics market (+3.3%). Within the IT segment we also noticed that the Euro Cup mania pushed the video-projectors and large monitor sales. Unfortunately, the loss within Office Equipment wiped out the positive numbers resulting in a small decline for IT & Office (-0,5%).
The Major Domestic Appliances Market keeps on flourishing. Within the cooling segment, it is especially American fridges that find their way to the Belgian kitchens (+6.6%). Furthermore, Small Domestic Appliances continues its growth with Low Oil Fryers, Hair Stylers and Handsticks leading the way (+8.4%).
On the contrary, rainy days in a particularly wet June caused disappointing numbers in the second quarter for Fashion (-4.8%) and Home Improvement (-4.0%). Garden centers suffered badly and consumers, mainly women, spent less on their summer outfits.
After two quarters of growth, Media & Entertainment couldn’t manage to continue this positive trend (-1.1%). Within the Gaming Industry the success of Uncharted 4/A Thief’s End couldn’t counterbalance the heavy decline within Catalogue (titles older than 13 weeks). the Book sector keeps on shrinking, too (- 4.3%).
Last but not least, the Telecom sector grows rapidly thanks to attractive subsidy models that Belgian operators offer (+12%). The customer is clearly choosing for high end model!
Despite the decline in the overall non-food market, it’s not all bad news! We wonder how these trends will evolve over the next quarter.
Wim Boesmans - Head of POS Measurement