Retail concentration in the Hungarian FMCG retail sector between 2010 and 2020

Abstract

THE AIMS OF THE PAPER

The main objective of the study is to examine the Hungarian FMCG sector in the period 2010-2020, from the perspective of retail sales concentration. As a part of this, the results are the result of secondary data processing after a presentation of the possibilities to measure the concentration and a review of related literature. A related aim is to shed light on the reasons behind changes in concentration.

METHODOLOGY

After a literature review, a secondary data analysis on data from secondary sources (Trade Magazin, Hungarian Central Statistical Office) was carried out. In the course of the analysis, the situation of the Hungarian FMCG sector is examined in terms of sales concentration. As a result of the analyses, the two most typical indicators, the CR indicator and the Herfindahl-Hirschmann index, are presented, as well as the changes in these indicators over the period under study.

MOST IMPORTANT RESULTS

The results show that there were major changes in the Hungarian FMCG sector over the period 2010-2020, with some players increasing their market share, others remaining flat in this respect and a downward trend in the figures. A further finding is that all concentration indicators show a decreasing concentration over the period under review, driven by changes in consumer behaviour and changes in the retail store structure (e.g. the appreciation of convenience stores and the loss of out-of-town chains).

Identifying the reasons behind the declining concentration of sales in the Hungarian FMCG sector is an added value.

RECOMMENDATIONS

Further research directions seem to be the best way to answer the question of how concentration on sales is related to other performance variables describing the sector (e.g. profit, number of employees, number of stores), i.e. how these variables interact, and a broadening of the analytical spectrum over time is also a suggested way forward.