56% of respondents expect worse financial results for companies in this industry in 2022, compared to the results of 2021.

Tuesday, June 14, 2022

The Consumer Retail Research Institute (IELKA) reports a decrease in sales in the second half of 2022, based on the rolling Trend Survey on Retail for fast-moving goods (FMCGs).

The results record an assessment of developments by industry executives themselves, based on consumer trends in the first half of this year and their respective expectations for the second half of 2022. Future estimates in the short term are not good: of the level of the economic climate to be negative during the period of the outbreak of the coronavirus pandemic.

Strongly negative effect from the war in Ukraine

From the results published by IELKA, the influence of the war in Ukraine on the operation of businesses is estimated to be particularly strong, with an even greater impact from the coronavirus pandemic. The greatest intensity of the impact of the coronavirus pandemic was recorded by IELKA in November 2020 at 4.76/10, while the current intensity of the crisis due to the war in Ukraine is already at 6.28/10.

It is noteworthy that 98% of market executives believe that the impact of the war in Ukraine will last at least until the end of the year and 8 out of 10 executives believe that it will affect 2023 as well.

Decrease in sales and worse economic climate in the second half of this year.

A very high percentage of respondents, 64%, who believe that sales in the FMCGs product sector will decline in the next six months. On the other hand, 22% expect sales growth. On average, the executives who participated in the survey estimate that there will be a decrease of 1.8% in sales in the first half of July and December 2022, compared to the same half of 2021.

The overall estimate for 2022 is similar: Executives estimate a steady decline in sales by 1.8%. In the present survey, the positive trend recorded in the assessment of the development of the economic situation of the country in 2021 is reversed. More specifically, in September 2021, 57% of the respondents considered that the economic situation in the country has improved and only 25% get worsened. Respectively, in May 2022 the overwhelming 87% believe that the economic situation has worsened and only 7% that it has improved.

Respectively negative percentages had to be recorded from the lockdown periods of 2020 or 2017, in periods of fiscal crisis. 56% of companies expect a worse economic result (profits / damages) in 2022, compared to 2021, due to the war in Ukraine and its consequences, while only 11% expect an ambitiously better economic result.

The rolling Trend Survey in Retail Trade FMCG of IELKA records the views of business executives in the industry on the main industry issues and challenges for the period 13 to 25 May 2022, using a structured questionnaire and a sample of 150 superior and senior executives of retail, supermarket chains and Suppliers of fast food products from General Directorate and departments of Marketing, Sales, Markets, Finance and Informatics.

Source: Foodreporter #0739/2022-05-31