DURABLE CONSUMER GOODS

Changes in this sector affect us all

As we said, this sector increased in terms of sales figures in most markets in the world during 2016 and is expected to happen again in 2017.

Although the data show good results, the consumer goods sector is facing enormous internal tensions resulting from the great global transformation that is undergoing. Retailers work with increasingly narrow margins in an environment of fierce competition coupled with the growing proliferation of online merchants.

The success or failure of these small businesses depends only on them and their ability to adapt to the implementation of new strategies and offer additional services, which unfortunately not every retailer can afford because it is needed, in most Although it is true that the volatility of the environment is very wide and can affect any operator in the sector regardless of size or commercial strategies have been successful or not.

We will briefly discuss certain markets to explain how they are affecting them:

Spain will suffer a slowdown in growth in sales

During 2016, the sector’s margins and the Spanish insolvency environment remained stable. Euro payment terms range from 60 to 90 days, although they can be extended to 120. Thanks to the increase in GDP, broad availability (higher than in previous periods) of consumer credit, increased consumer confidence, to private consumption and to low inflation, sales of consumer durables have been boosted and grown.

France sales of real estate rose sharply in 2016

However, this growth was depleted during the second half.

On the other hand, consumer electronics grew by 2% in 2016, after five years of decline thanks to the sale of televisions in a very competitive environment with a significant pressure on sales prices, which explains the low profitability of the sector .

So what are the forecasts for 2017? They are not very clear as consumer confidence is affected by institutional uncertainty. Payments in the industry, unlike Spain, have an average of 45 days and are not expected to increase in 2017. Competition will continue to be fierce, and an exponential stabilization of insolvencies is expected in 2017.

Great Britain: Despite the growth of the retail sector in 2016 thanks to the increase in private consumption, they will face a difficult year in terms of
consumption due to prices, the pound and social uncertainty.

Online sales in the sector represent 15% of the market, grew again above 20%.

As we said before, it is expected that during 2017 a complicated period will be experienced in the durable consumer goods sector due to the situation of the pound, the pressure imposed on prices, and also due to the uncertainty surrounding the future of the United Kingdom.

Their relations with the European Union do not help to sustain investment spending, which is likely to lead to delays in both contracting and wage increases and a slowdown in retail sales growth.

Payments in the industry are more similar to Spain, 60 days and insolvencies are expected to increase slightly with increasing economic uncertainty.

United States: the retail environment will remain very competitive due to customer preferences.

In the United States, the retail sector accounts for two-thirds of GDP and makes it possible to employ almost 16 million people.

During 2016, online sales grew 14%, the highest growth recorded in five years.

2017 perspective for US consumer durables sales continues to be positive, thanks to the good state of private consumption driven by the real estate market, employment growth and wages. The online channel will continue to grow as in all markets as well.

China: On line sales grow 35% thanks to purchases of appliances.

China’s growth in the second half of 2016. Sales of durable consumer goods, a fact that will most certainly be maintained during 2017.

In November, the Chinese Administration announced support policies to improve the business environment of retailers.

We must keep in mind that China is about to become the largest e-commerce market in the world.