Macroeconomics Insight Center

Have you been browsing our insight centres recently, or revising your market, channel or retailer strategy? Have you noticed that some of the data has changed? Indeed, it has, but don’t worry, everything’s under control and we would like to explain why.

What changed and why?

Volatile changes in the economic conditions in which retailers are operating have direct and indirect impacts on the results they are reporting for the last financial year.

At Kantar we strive to provide our clients with the best quality data, which explain elements of retailers’ operating realities they cannot control directly, e.g. operational market productivity, strength of currencies, consumer confidence driven by the employment situation as well as consumer price dynamics. Here are the callouts to which you should pay most.

1.       Currency Exchange Rates

The majority of our clients look at market, channel or key account data chosen by their company reporting or regional currency, e.g. US Dollar, Canadian Dollar, Euro, British Pound, Swiss Franc, Hong Kong Dollar, Chinese Yuan, Russian Rouble etc.

Volatility in financial markets has had an impact on several currency exchange rates corrections in the period between 2010 and 2018 and, most importantly, on the outlook of the strength of those currencies in the five-year forecast period. We highlight specific areas that should be of your concern below and advise that you revisit your market, channel or account plans, and update them with our latest data reports that include those changes. Please be mindful that all retailers’ forecasts are exercised in local market currencies.

Chart 1. Retail iQ - major markets’ currency exchange rates revisions

Source: Kantar Retail iQ; IMF data published in October 2018

Chart 2. Retail iQ – exchange rate revision impact on major international retailer’s market forecast 

Source: Kantar Retail iQ

2.       Gross Domestic Product

Our latest macroeconomic data and forecast revisions addressed some significant shifts in global markets. Many economies have had their Gross Domestic Product projections revised, and we’ve also taken on revisions of some historic data following International Monetary Fund reported adjustments. Please see the chart below that explains the nature of these revisions in major global economies. 

Chart 3. Retail iQ – major markets’ composition of GDP data revision

Source: Kantar Retail iQ; IMF data published in October 2018

3.       Consumer Price Indices

Retailers have been and will continue to be subject to changing local inflationary and deflationary pressures. The chart below highlights the revised Consumer Price Index projections for the forecast period 2019 to 2023 for some selected markets.

Chart 4. Retail iQ – Major markets’ revised projections for Consumer Price Indices

Source: Kantar Retail iQ; IMF data published in October 2018

What does it mean to me and what happens next?

Some of the revisions mean that our historic or forecast data for retailer and channel aggregates have changed. Most international retailers’ forecasts have been, to some extent, impacted by these foreign exchange rates revisions. However, as our analysts are currently in the process of revising retail chain data and their forecasts in our database coverage, we will be addressing any data and forecasts in more detail, to guarantee the most recent macroeconomic and exchange rate impacts are considered.

We estimate this process will be completed by mid-May. The outcomes will be reflected in our 2019 Top 50 Global, US and European Retailers rankings.

Any concerns?

Should you have any concerns related to these macroeconomic data revisions or wish to understand the global macroeconomic situation in more detail, get in touch with our experts:

Karolina Fiedler, Global Data Manager – karolina.fiedler@kantar.com

Doug Hermanson, Principal Economist – doug.hermanson@kantar.com

Ray Gaul, SVP Research and Analytics – ray.gaul@kantar.com

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