Consumption: the decline does not stop (-2.3% at the end of 2013)
At the end of the first half of 2013, household spending was 3.2% lower than in the same period last year. Although less intense than in 2012 (-4%), the negative evolution, now in the tenth consecutive quarter, confirms the persistence of the difficulties associated with the sharp deterioration in the purchasing power of Italian households.
Therefore, a reversal of the trend in consumption within the year does not seem probable, but a continuation of the fall, at an increasingly more contained pace; as a result, on average for the year in 2013, a reduction in consumption of -2.3% at constant prices is expected. The evolution, however, could be differentiated between and within spending segments, reflecting increased selectivity and polarization in consumption decisions.
Confirmation of the difficult situation in the consumer world and of the still weak recovery prospects comes from the advertising market, which fell in the first nine months of 2013 at the same rate as in 2012 (-14.3%), above all due to the heavily negative contributions of companies in the automobile, clothing, footwear and publishing, and for the first time in many years with a negative change also for Internet advertising.
Weakly positive signals, however, come from durable goods, for which the available information signals a significant attenuation of the fall in purchases - thanks to the driving force of household goods, in particular electrical appliances - as a reflection of the no longer postponeable need for renewal and the tax incentives.
The recovery in the two-year period 2014-15 will be moderate and not widespread in all sectors
The recovery path from the minimum level of consumption will be slow and partial, with volumes that in 2015 could still be 7% lower in real terms than those of 2007. feed spending decisions of a precautionary nature, with the aim of rebuilding part of the savings and wealth eroded in recent years.
A limited recovery in food consumption is expected in the two-year period 2014-'15, which will also benefit from the easing of price dynamics. Non-food consumption, on the other hand, could show a further decline in 2014, with however more favorable prospects for services and durable goods. However, within this category, the need for renewal and the presence of tax incentives will drain the few resources available towards home-related products (furniture and appliances), to the detriment of those considered less necessary and more voluptuous at this stage ( especially clothing), for which a further rationalization of purchasing behavior is expected.
On the other hand, growth prospects remain positive for more innovative ICT-related products, with negative effects instead for telephony services given the greater preference for device able to converge on the web communication needs, and for health-related expenses, both for demographic dynamics and for the lower support of public spending.
The economic-financial situation of retail distribution companies deteriorated sharply
The deterioration in the demand for consumer goods effectively eliminated the growth in the turnover of commercial retail distribution companies, with particularly intense negative effects on income results. In particular, sacrifices on margins and reduced purchase volumes have further aggravated the income conditions of SMEs, already particularly critical in some sectors.
The analysis of the financial statements relating to 2012 for over 7 retail commercial distribution companies also highlights the critical issues for many medium-sized companies, which, having so far adopted growth strategies through the opening of new points of sale, have experienced due to the slowdown in turnover and sacrifices on margins a strong increase in fixed costs. In fact, those realities which in the years preceding the crisis were unable to adapt organizational structures and make structural costs more efficient are particularly affected.
If, due to the intensity of the contraction in consumption, it is above all companies active in the distribution of durable goods and for leisure time, there is no shortage of conditions of strong deterioration in the food sector, especially for medium-sized companies, which have been operating for three years now with almost zero margins.
In addition to the sectoral and dimensional specificities, the income results reflect with increasing precision the effectiveness or otherwise of the strategies adopted by the individual companies, with extremely heterogeneous economic and financial conditions even within the same clusters.
In fact, in a particularly critical year for the evolution of consumption such as 2012, over 15% of the companies in the sample showed double-digit positive changes in turnover and an even higher percentage, around 25%, showed profitability above 10%. Even in the sectors of the distribution of durable and leisure goods, most affected from the point of view of turnover (over 70% of companies showed negative changes), there is still a strong group of companies (15%) able to maintain profitability at very high levels.
Among the strategic levers adopted by successful companies even in these years of crisis, it seems increasingly important to have managed to shift attention from price to factors capable of safeguarding the creation of value, such as assortment focus and improvement of pre and post sales services. The regionalization programs of commercial policies also had greater importance, differentiating assortments and commercial communication according to the characteristics of the territorial catchment area of each point of sale. Positive effects also came from customer loyalty programmes, especially those implemented through the websites, signaling an increasingly mandatory direction for the commercial strategies of retail distribution companies in the coming years.
