Italy is the EU's fourth-largest consumer market, but for the past ten years demand has been weak. Private consumption contracted in real terms in five of the six years to 2013, compounded by the impact of fiscal austerity measures, including value-added tax (VAT) increases in 2012 and at the end of 2013, and felling disposable incomes. A modest recovery got under way in 2014, but at the end of the third quarter household spending was still almost 8% lower than its mid-2007 pre-crisis peak.
The Economist Intelligence Unit expects high levels of unemployment and taxation, sluggish wage growth and tight credit conditions to keep demand for consumer goods depressed during most of the forecast period (2015-19). The prolonged weakness of the economy will also continue to drive changes in patterns of demand, with an increasing proportion of sales made online.
Despite its weak economic performance compared with its European peers, Italy is still a relatively wealthy country with high, albeit felling, savings rates. Household consumption per head is forecast to decline in the first half of the forecast period, reflecting mainly US dollar strength, before recovering modestly in 2017-19. We forecast that at around US$20,000 in 2019 it will still be below its 2014 level and still substantially lower than expected levels of about US$24400 in France and US$27,000 in Germany.

Consumer goods and retail report 2

Overview 2

Retail 3

Food and drink 6

Non-food products 10

Industry publishing schedule 14

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