Marinidis, head of P&G Balkans: We expect consumer spending to stabilise in 2010

Sotirios Marinidis, one of the most powerful executives in the consumer goods sector, provides the first optimistic forecasts for this market in 2010.
The general manager of P&G Balkans, the company that makes Head&Shoulders, Gillette and Pampers, relies on a stabilisation of consumer spending and a progressive rebound of retail this year, after an about 10% decline in 2009. The estimate is in line with the government’s forecast, which built the budget on a 3% increase in consumer spending.
P&G is currently building its biggest shampoo factory in the world in the town of Urlati, Prahova county, following a 100 million-dollar investment. The first phase of the project will be completed in the next few months.
“We hope for a stabilisation of the market in 2010. Discipline and strictness in cost control and investments in production facilities and innovation will be strategies that will allow companies to cope with the current macroeconomic situation,” says P&G Balkans boss.
The 44-year-old manager who supervises a 400 million-dollar business in Romania says that retail sales fell by about 10% last year compared with 2008.
“After an apparent stabilisation in spring, the decline of domestic demand became worse in June, and all the sectors were affected – with the food sector affected less and the services sector more. The consumer goods segment continued to increase in value last year, compared with 2008, but we could also notice less frequent shopping and an increase in sales of hypermarkets and discount stores,” Marinidis says.
The company saw declines especially for those categories regarded as “dispensable”, such as fabric softener and hair conditioner in 2009.
The segment of fabric softener shrank by 32% in volume last year compared with 2008, double the decline of the detergent market, as revealed in a survey by market research company MEMRB.
The increase in consumer goods sales in hypermarkets and discounters was another effect of the drop in purchasing power, given that the two store formats – which account for 50-60% of the modern food retail together, relied on selling products with the lowest price on the market.