How much a product costs is an important factor; not just for consumers but also for retailers. For the consumer this doesn’t simply mean that cheapest is the best option, but price is part of most buying decisions.
From the retailers’ position, we see a backdrop of rising prices with currency movements and an on-going highly competitive selling landscape. At time of writing the Consumer Price Index stands at 2.3%. So what does this mean for price movements and what evidence are we seeing in the consumer durables sectors as tracked by GfK POS Tracking?
From the 2017 data so far we can see that for the consumer durables markets ASP (Average Selling Price) has increased by 0.7% and both volume and value have increased by over 3% year on year. Overall, a small increase in pricing has not affected sales. However, this does differ by sector and category, and we’ll explore a few below.
Firstly, Consumer Electronics, Major domestic appliances, Small domestic appliances and Photo have all experienced price increases with volume and value decreases. IT is different in that we see ASP down by -9% with volume increasing by 16% and value up 5%. In Telecoms we see an ASP increase with a value increase but a volume decrease.
Rounding up with the DIY and Garden markets we are seeing the effects of the Easter break being earlier in the year however this is not the only effect in this market. We see the DIY market with a 2% increase in ASP with value down -9% and volume down -11% YoY mainly driven by a rise in the premium sector of paint. Whereas in Garden, helped in part by the weather, we see a 2% decrease ASP with value up 4.8% and volume up 7% YoY showing that two closely related categories are showing differing stories but still rising prices.
Overall the answer to the initial question, are prices going up, is on the whole yes however we do see at a total market level value and volume are still growing and outside factors are having an effect on the different markets. There is still opportunity for retailers to grow value at these higher prices. Calculating price elasticity and understanding consumer behaviour in this period has never been more important and with GfK’s market, elasticity and consumer data we are there to help every step of the way.
*GfK Point of Sales Tracking, UK market. * Year-on-Year (YOY) movements Based on GfK monthly data – January 2016 - March 2016 (Dates 03/01/2016 – 02/04/2016) v January 2017 - March 2017 (Dates 01/01/2017 – 01/04/2017), January 2015 - March 2015 (Dates 28/12/2014 v 28/03/2015) v January - March 2016 (03/01/2016 – 02/04/2016)