| | | Rich consumer, poor consumer. Which one will prevail? | | -June 04, 2003- | The middle class is insignificant going to infinitesimal. In the absence of accurate data about the income categories of the population, the only way to analyse the issue is to look at the type of products used: premium products, middle and low-end products. And the middle is getting thinner and thinner where many products are concerned
"There's not much of a middle class in Romania, where 10% of the population, i.e. the very high-income people spend about as much as the poor half of the population. This weight has not changed over the years, meaning that the incomes of the middle class, which does exist in Bucharest and in the major cities, though, have not increased," Andi Dumitrescu, research co-ordinator with GfK Romania feels. He says this trend is apparent mainly in the case of FMCG.
"The year began with declines for major categories of the consumer goods market, i.e. detergents, edible oil, margarine," Dumitrescu says.
Marius Caluian, group account manager with MEMRB market research company also sees another side to it.
"It is true that certain categories are witnessing a lower consumption of middle products, but we cannot draw a general conclusion from that. Things are very much up to the specific of every category," Caluian says.
MEMRB says that soap and detergents saw an increase for the premium category throughout March-April, compared with the same time in 2002 at the expense of the middle products. Shampoo is yet another product to register an increase for the premium category at the expense of the medium category.
Those selling cosmetics find it obvious: the middle class is fading away.
The 'prestige' products buying class keeps constant, while the middle class, which most of the suppliers target is losing ground to the poor class. This trend started in 2002 and seems to go on this year, as well. The Body Shop is a multinational company targeting the middle class, which is going up almost everywhere else in the world. This makes our mission in Romania very difficult, as we are seeing our target clients practically disappear," Dana Tudorache, The Body Shop Romania general manager says.
The most frequently used solution in this case is shifting to low-end products. "We're trying to adjust to this situation and avoid importing the most expensive product lines of the company, also increasing the number of promotional offers," Tudorache added.
Edible oil producers are hit even worse. "The middle class is shrinking, and the argument not only we, the edible oil producers but other foodstuffs producers have is the emergence of cheap, suspicious quality products. We're trying, however, to adapt by broadening the product range and cutting down on our profits," Robert Arsene, Unirea Iasi edible oil producer general manager says.
sorin.pislaru@zf.ro
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