Retail Tissue in Eastern Europe

April 2017

The retail tissue market in Eastern Europe has been hindered by the economic downturn of many countries, as some have been slow to recover. This has led consumers to favour economy products at low prices, paving the way for the growth of private label. With low per capita consumption, there is much room for growth, especially as consumers’ disposable incomes are expected to rise and habits shift towards the usage of additional retail tissue products that are undeveloped in this region.

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Slow economic recovery impedes significant value growth

Eastern European markets recorded growth in retail tissue volume and value sales in 2016, with volume growth slightly exceeding value growth at the regional level. Fluctuating local currencies and reduced disposable incomes led many consumers in Eastern Europe to shift their spending habits towards cheaper retail tissue products. Price competition led to increased discounting, squeezing manufacturers’ revenues.

Toilet paper dominates retail tissue, while underdeveloped product categories begin to expand

Toilet paper accounted for 65% of value sales and 78% of volume sales in overall retail tissue in Eastern Europe in 2016. This is due to the perception among Eastern Europeans that toilet paper is an essential item, even in tough economic times. However, as the economy is recovering, there is a growing demand for less developed product categories, particularly paper towels. Significant growth in these other categories in countries such as Russia, where growth depends on uncertain financial conditions, is expected in the long term rather than the short term.

Growth in private label due to improved price/quality ratio and growing dominance of modern retail

The share of private label in Eastern European markets has risen, as consumers in economically vulnerable countries increasingly look for value products. However, private label manufacturers are not only focused on low prices, but are also emphasising quality at an attractive price. Modern retail chains are widening their offerings at both ends of the spectrum, and introduced premium private label products in recent years, with extra softness, higher absorption and design elements.

Trend towards premium products as disposable incomes rise in Baltic states and certain central European states

Retail tissue in eastern states such as Russia is defined by a trend towards lower-priced items, as these markets continue to face economic uncertainty. On the other hand, nations in the Baltic (Estonia, Latvia, Lithuania) and central European (Poland, Romania) regions are experiencing a rise in disposable income and purchasing power. This has led to increased demand for premium, higher-quality products, as well as non-essential items such as paper towels and facial tissues.

Introduction

Scope
Key findings

Regional Overview

Putting Eastern Europe into context
Recovery and a positive growth trajectory through to 2021
Fastest growth in smaller, underdeveloped categories
Russia and Ukraine: polarising tendencies
Price competition and economic uncertainty impede revenue growth
Modern retail gains ground amid a shift away from traditional grocery
Better product assortment and private label rise in modern retail

Leading Companies and Brands

Private label continues to grow
Regional leader SCA Group increases its share; still behind private label
The Zewa brand remains untouched in the top spot

Forecast Projections

Belarus is set to see the fastest growth
Untapped consumers vs economic headwinds and pricing pressure
Growth drivers: Habit formation and soft drivers vs fundamentals
Future performance: Supporting routine adoption and competitive prices

Country Snapshots

Belarus
Belarus
Bosnia-Herzegovina
Bosnia-Herzegovina
Bulgaria
Bulgaria
Croatia
Croatia
Czech Republic
Czech Republic
Estonia
Estonia
Georgia
Georgia
Hungary
Hungary
Latvia
Latvia
Lithuania
Lithuania
Macedonia
Macedonia
Poland
Poland
Romania
Romania
Russia
Russia
Serbia
Serbia
Slovakia
Slovakia
Slovenia
Slovenia
Ukraine
Ukraine

Appendix: Competitor Analytics

Competitor Analytics tool
Overview
Competitors
Market Overlap
Treemap
Overlap Matrices

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model
Soft drivers and the Industry Forecast Model
Growth decomposition explained
Significance and applications for growth decomposition
Key applications for Industry Forecast Models
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