Slovenian food market dampened by tight spending

Published last month by Business Monitor International, the Slovenia​ Food and Drink Report Q4 2010​ forecasts double digit growth in food and drink sales by 2014, but says these could be pushed down by lower spending patterns.

“Slovenia is a mature food and drink market, with a well-developed mass grocery retail infrastructure. As such, the longer-term returns on investment will remain subdued in potential, while the immediate operating environment will continue to suffer the fall-out of the economic crisis, both in terms of volumes and values,”​ notes the report.

Spending squeeze​

Mass grocery retail sales are forecasted to increase by 28 per cent to 2014, while soft drink and alcoholic drink sales are expected to increase by 11 and 17 per cent respectively in the period.

However, the report notes that Slovenia has been impacted by a tightened focus on EU member state finances after the crisis faced by Greece, with the government already cutting 2010 state expenditure by €500m. These cuts, it says, will be achieved through public sector wage cuts and restrictions on student employment – heralding lower disposable income.

“In addition to high unemployment rates, the situation provides little room for optimism in regards to consumer spending during the year, potentially dampening the forecast food and beverages volume and value growth.”​

​

“On a large scale, as a small and heavily trade and investment-integrated economy with Western Europe, the performance in the Slovenian economy will remain hampered beyond 2010 by protracted weak demand from the eurozone, as well as by lower levels of marketing and investment ploughed into Slovenia by EU companies.”​

​

Regional investment​

​

Nevertheless, although major multinationals are expected to “largely sideline”​ Slovenia, key regional players will continue to show interest in the market, notes the report.

This is partly down to high per capita incomes allowing some room for growth of premium goods, which are expected to remain well-supported by concerted marketing campaigns.