European food retailers: The bitter digital aftertaste of the Covid-19 legacy

The Covid-19 crisis has fast-forwarded Europe’s e-commerce transition by four to five years, especially in food retail: In the top five markets, e-commerce penetration now ranges from between 3% to 11% of grocery sales. But we estimate that every percentage of grocery sales moving online threatens EUR13.6bn in sales and up to EUR1.9bn in profits (4% of total). 

Life after death: The phoenix-like rising of Japan´s life industry

Japan’s life industry as a whole has weathered the long yield winter remarkable well, staying profitable in an environment where interest rates and growth basically disappeared. Yet, we find that there is still some room for improvement within the local market, namely consolidation, even as life insurers start to hunt for growth overseas, mainly in Asia and China, arguably the biggest opportunity in the sector.

Export performance in Europe: a sink or swim game

European exporters, and France in particular, have lost significant market share over the past two decades as China emerged as a global exporter for manufactured goods. China’s remarkable export expansion has coincided with the dramatic decline of France’s export shares since 2001: -1.7pp, compared to -1.3pp in Germany and -1.1pp in Italy. 

ECB: Roaring reflation no reason to flinch

Despite the roaring return of inflation in H2 2021, the ECB should not flinch at next week’s policy meeting. In particular, it should refrain from taking an unneccesary bet on how the pandemic, the economy and yields (and in turn US monetary policy) will develop over the next quarter by pre-committing to a lower PEPP purchase pace. 

European SMEs: 7-15% at risk of insolvency in the next four years

In 2020, state support overcompensated for the Covid-19 shock, reducing the number of fragile SMEs by more than 8,000 in Germany, France and the UK. Yet, we find that 7%, 13% and 15% of SMEs  in the three countries are still at risk of insolvency in the next four years. 

Europe´s pent-up demand party is just getting started

The strong rebound in European Q2 GDP growth highlights that there is significant room to grow in the sectors most exposed to Covid-19 restrictions. We expect unleashed pent-up demand to provide a boost to these sectors through 2021, especially in Spain, France and Belgium. 

Australia´s pension system: No reform can replace financial literacy

Demographic change poses a formidable challenge for Australia: Despite only a modest increase in the old-age dependency ratio, the number of people aged 65 and older will almost double from 4.1mn today to 7.4mn within the next 30 years.

Chip shortages to boost carmakers´pricing power in Europe

An unprecedented and intensifying shortage of materials, notably semiconductors, is creating a supply-demand mismatch in Europe's automotive sector that could last until H1 2022. This creates a unique window of opportunity for carmakers to raise prices by +3-6% after nearly 20 years of constraints.

European Central Bank: New wording, old problems

ECB confirms dovish bias of its new strategy. In its closely-watched pre-holiday meeting, coming close on the heels of its strategy review, the ECB offered its first indications on how the new inflation target - raised from “close to but below 2%” to a symmetric medium-term target of 2% - will be implemented.