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.
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 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.
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.
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.
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