According to what he reports atradius, if one looks at the turnover and business volume recorded in 2016, the performance of retailers of consumer durables may seem, at first sight, satisfactory. Sales have increased in most European markets and analysts expect this growth to continue this year as well. However, profit margins of most consumer durables retailers are slim as competition between high street retailers remains fierce and is exacerbated by the growing challenge from online retailers: the policy of transparent prices to consumers carried out by online retailers keeps pressure on profit margins along the entire value chain.
Therefore, Enterprise success and retailer resilience increasingly depend on their ability to adopt new strategiessuch as building and expanding your online business and/or offering additional services. This requires a significant willingness to change, as well as the implementation of an efficient financial strategy, and it remains to be seen whether many of the already struggling small business owners have the means and knowledge to realign their businesses in order to remain competitive. Here then is that the lack of will or means necessary to adapt to a volatile and constantly changing market environment can in the short term lead to serious problems for both large and small retailers, regardless of how much they are started on the market or how successful have had in the past
In this context, in 2017 the growth of private consumption in Italy is expected to slow down to 0,5%, after the 1,4% increase recorded last year. Tuttavia, domestic demand for consumer durables should remain stableand since retail sales are expected to grow by +1,9% and inflation should only increase by 1,7%. Resellers' profit margins should therefore remain stable: the sector continuesIn fact, to be very competitive and with a medium-high level of fragmentation even after the mergers involving some of the main operators. The weakest companies with little financial solidity have been pushed out of the market, while others have chosen to merge in order to survive. Analysts predict that the current concentration process will continue until a new market equilibrium is reached, considering that the average size of Italian retailers continues to be smaller than those of European competitors.
Due to dependence on the real estate sector, the furniture sector recorded a constant decline until the recovery that began in 2014; last year the demand for furniture grew by 2,2% and will be further supported this year by the new state incentives to support household consumption. During the same period home appliance sales recorded growth of 2,9% also thanks to the government incentives partially confirmed for 2017. Payment terms fluctuate, on average, between 60 and 90 days; cases of late payments and insolvencies remained stable in 2016 and no significant changes are expected this year.
In the last two years the Swedish consumer goods retail sector grew faster than GDP and is expected to grow by 3,5% this year thanks to the solid performance of private consumption and the increase in population. The sector benefited from low interest rates, the growing attention towards new furnishing trends and the increase in property prices. However, the risk of a possible contraction in the real estate market could curb the growth prospects of the furniture and household appliances sectors for 2017. This year, in fact, the profit margins of retailers are expected to remain stable or slightly contracting. While the price war in the consumer electronics sector appears to have subsided, the sporting goods segment shows the first signs of increased competition, which is also present in the furniture and textile sectors. Furthermore, currency fluctuations influenced the choices of importers and exporters.
Payments in the Swedish consumer durables sector take an average of 45 days. Analysts do not expect an increase in non-payment cases while the number of insolvencies is expected to decrease again after the 4% growth recorded in 2016. Newly established businesses, however, are most at risk in this highly competitive market, since online retailers generally benefit from better prospects thanks to the growth opportunities offered by low-penetration segments. Swedes increasingly choose to buy online and this segment should continue to grow in the coming years: hence the effect of the diffusion of e-commerce and the movement of sales points to large shopping centers outside the city will continue to transform the Swedish consumer durables retail sector.
