Retailing in Hungary 2008

Verdict Research: From a retail standpoint Hungary has the lowest five-year growth in spend in the CEE. Hungary's GDP growth lags the rest of CEE (apart from Slovenia), while inflation has rocketed in recent years. In response the government has implemented an austerity programme, which has reduced consumer expenditure over the last two years. As a result retailing is extremely price focussed.

Report Highlights
Against western European retailing and purchasing power, Hungary is a small market. While growth looks healthy at 9.3% in euros, in Hungarian Forints overall retail expenditure in 2007 only grew by 2.9%, significantly slower than other Central and Eastern European markets.

The four musketeers of German retailing, the discounters Aldi, Lidl, Penny and Plus are growing strongly. Penny and Plus have dominated the market with more than 150 outlets each, but there is rapid change. Lidl has established its business rather quickly, and Aldi has started its expansion through its Austrian subsidiary Hofer.

New formats such as furniture boulevards and Factory Outlet Centres have made their mark. That said, in many areas these formats are ahead of their time. Hypermarket development has only now reached saturation levels. Due to the austerity measures instigated by the Hungarian government purchasing power could be depressed for a long time to come.
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CHAPTER 1 EXECUTIVE SUMMARY 6
Key Findings 6
Main Conclusions 7
CHAPTER 2 CENTRAL & EASTERN EUROPEAN MARKET - ECONOMIC OVERVIEW 10
Key Findings 10
Key Messages 11
GDP 12
GDP Forecast 16
Consumer Expenditure 17
Inflation 18
Interest Rates 19
Employment 20
CHAPTER 3 CENTRAL & EASTERN EUROPEAN MARKET - DEMOGRAPHIC OVERVIEW 21
Key Findings 21
Key Messages 22
EU Population Profile 23
EU Population Trend 24
CEE Forecasts 25
CEE Forecasts 25
Urban Population 26
CHAPTER 4 CENTRAL & EASTERN EUROPEAN MARKET - RETAIL SPENDING 28
Key Findings 28
Expenditure 29
Growth 30
Per Capita 34
Retail Share 36
CHAPTER 5 RETAILING IN HUNGARY 38
Overview 38
Food & Grocery 41
Tesco 42
CBA 43
Co-op Hungary 44
Reál Hungaria 44
Spar 45
Other Players 46
Non-food 47
Clothing 47
DIY 49
Electricals 51
Furniture 53
Outlook for Retailing in Hungary 55
CHAPTER 6 GLOSSARY 57
Definitions 57
Abbreviations 58
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Table 1: CEE retail expenditure 2002-2007 29
Table 2: CEE retail expenditure growth 2002-2007 31
Table 3: Hungary total retail expenditure & Top Five sectors 2002-2007e 38
Table 4: Hungary food & grocery market shares 2007e 41
Figure 1: CEE GDPs 2007 12
Figure 2: CEE & selected EU GDPs per capita 2007 13
Figure 3: CEE GDP growth rates 2007 on 2002 14
Figure 4: GDP growth forecast of CEE countries 2008 & 2009e 16
Figure 5: Consumer expenditure of CEE countries 2007 17
Figure 6: Harmonised index of consumer prices - growth in CEE countries 2006 & 2007 18
Figure 7: Central bank interest rates, official lending rates average 2007 19
Figure 8: Total unemployment rates of CEE countries 2002 & 2007 20
Figure 9: EU 27 population totals (000s) by country 2007 23
Figure 10: Five-year trend in EU25 population growth 2000-2020e 24
Figure 11: Forecast population growth for CEE countries - 2033 & 2058 on 2008 25
Figure 12: % urban population in CEE countries 2007 26
Figure 13: New member states retail spend and change % 2002-2007 30
Figure 14: Five-year growth in CEE retail spend by country 2007 on 2002 32
Figure 15: CEE per capita retail spend 2002-2007 34
Figure 16: CEE per capita retail spend by country 2007 35
Figure 17: CEE retail spend as % of total consumer expenditure 2002 & 2007 36
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