For the first time, GfK GeoMarketing is releasing a study on purchasing power for retail product lines for European countries such as Austria and the Czech Republic. The study shows that Europeans' consumption potential varies widely both between and within individual countries.
GfK GeoMarketing is releasing a new study on purchasing power for retail product lines in European countries. The study gives retailers an objective benchmark for assessing consumption potential on a region-by-region basis. Due to the significant differences in Europe's income levels, consumer behavior and expenditures on product lines vary widely across the continent.
People with lower incomes typically spend a larger share of their earnings on daily needs, such as groceries. The share of spending on luxury product lines such as jewelry and consumer electronics increases as average income levels rise. However, there is not a linear relationship between these two variables, as higher income earners often devote a large share of their earnings to non-retail items such as rent, traveling, insurance and various services.
The GfK Purchasing Power for Retail Product Lines dataset reveals region-specific demand for retail and mail-order goods in both the food and non-food sectors. The data give retailers a precise indication of the total market potential on a region-by-region basis. The purchasing power figures are based on consumers' places of residence and, as such, serve as guideposts for retailers' marketing-related planning and product-line management.
Czechs spend around one-third of income on groceries
Czechs spend around 35% of their retail purchasing power on groceries, while Austrians and Germans only spend 30.1% and 26.1%, respectively.
Austrians value health and appearance
Austrians are in the lead when it comes to expenditures related to health- and body care. At 568 per person, Austrians spend twice as much on this product line as Czechs (249 per person) and significantly more than Germans (389 per person). Austrians also spend almost four times as much on furniture and furnishings as Czechs (524 versus 134).
Germans are confirmed technophiles
Inhabitants of Germany are particularly drawn to technology-related items. German consumers devote 8.2% of their retail purchasing power (415 per inhabitant) to consumer electronics, electronic media as well as information- and telecommunications technologies. By comparison, Austrians only spend 5.9% (336), while Czechs spend 4.9% (137).
Although these purchasing power figures have not been adjusted for inflation or a cost-of-living index, they still effectively reveal differences in price levels between individual countries: For example, the higher prices for cigarettes in Germany and Austria mean that a greater share of purchasing power is spent on these items than in the Czech Republic, where prices for these products are lower.
Inhabitants of Wien I Innere Stadt district spend more on food and luxury items than inhabitants of any other district (index = 152.2, 3,548), while inhabitants of the Zwettl district spend the least (index = 87.1, 2,031).
Inhabitants of Wien XVIII Währing district - one of the ten districts with the highest retail-relevant income (6,576 per inhabitant) - only spend an average amount of their retail purchasing power on DIY-specific products (index = 99.8, 604). Expenditures on this product line thus amount to a 9.2% share of the total retail spending.
Inhabitants of Güssings district have a retail purchasing power of 5,043 per person and spend 651 on DIY-specific products. This equates to 12.9% of their total consumer spending. In terms of the country as a whole, 10.6% is spent on DIY products. Inhabitants of Völkermarkt district spend the least on DIY products - a mere 478 per person, which is 20% below the national average.
Although inhabitants of Murau district have 5,100 per person available for retail purchases (index = 89.2), they only spend 148 per person on consum