Patrycja Nalepa, PMR Publications

The economic environment in Central Europe remains dull, in particular when compared to the 2008-2009 period. According to specialised market research firm PMR Publications, the difficult and uncertain situation on the Central Europe labour markets, as well as fiscal austerity measures (wage and staff cuts in public administrations in Romania, Slovakia, the Czech Republic and Bulgaria, as well as VAT increases in Poland and Slovakia), constrained the income of households and their propensity to consume thus directly impacting the cosmetics market.

Total sales of cosmetics in Central Europe grew by 2.3% (at local currencies) in 2011 and reached the value of EUR 8.6bn. The highest increase, of 3.2%, was recorded in Poland, which accounts for more than a half of total cosmetics’ sales in the region, as indicated in the latest PMR Publications’ report. [1]

In 2012 the overall value of the Central Europe cosmetics market is expected to grow further, though only at a rate of 1.5%,” says Patrycja Nalepa, Senior Retail Analyst at PMR Publications.

Romania and Poland to drive growth

Two countries, namely Bulgaria and Slovakia, are predicted to see higher growth rates compared to 2011. Romania and Poland will be growing the fastest with a rate of 2.2%.

In the case of Romania this is, however, much lower than previously predicted. The initial expectations of many players on the Romanian cosmetics market, who had indicated a growth of their sales this year ranging between less than 10% and others a two-digit surge, have been tempered during 2012,” comments Patrycja Nalepa.

Decreases in Hungary and Czech republic

PMR Publications also forecasts that Czech Republic and Hungary will experience decrease in cosmetics sales in 2012. “In Hungary, macroeconomic indicators are again deteriorating in 2012,” explains the firm, and “sales by volume are not expected to grow during next years.

In the Czech Republic both economy and private consumption are declining and growth of wages does not offset rising prices.

However, for 2013 and 2014, PMR Publications deem that sales of cosmetics will eventually increase in all the countries in the region.