UK shoppers spent a total of £53.7 billion on FMCG in the third quarter of 2024 – a 3.7% lift on the same quarter last year – according to data from NIQ’s Retail Spend Barometer from GfK Intelligence.
The results indicate that consumers are beginning to relax into spending, following a period of high inflation.
NIQ data showed that the value growth from the FMCG sector increased from 1.2% in Q2.
An uptick in the personal-care (10.7%), homecare (8.7%), fresh food (5.8%) and snacking (5.1%) categories primarily drove growth.
Beverages returned to growth in the quarter, to 2.1%, from a decline of 0.9% in Q2.
Meanwhile, NIQ reported the biggest declines in the categories of tobacco (-7.9%) and paper products (-4.1%).
Rebound growth was largely attributed to sales boosts from the European Football Championship and the Olympics, which took place in July and August.
Slightly sunnier weather, compared to last year, also offered a boost.
However, despite improved consumer confidence in Q2, this confidence stalled in Q3, as economic and financial uncertainty continued to impact consumers.
Falling inflation is continuing to have a positive effect on the FMCG sector, now leading to a growing increase in volume sales.
NIQ data also reveals a narrowing gap between private-label and branded products, as the growth indicates that shoppers are making small indulgences again.
In Q1 for 2024, FMCG branded unit growth was 0.7%, compared to 3.1% growth for private-label products.
However, the gap narrowed in Q3, as branded unit growth landed at 1.1% versus 1.7% for private label.
‘Shoppers Remain Cautious’
Commenting on the results, the retail services director for NIQ UK and Ireland, Ben Morrison, said, “The first eight months of the year, so far, have been more optimistic compared to 2023, but shoppers remain cautious.”
On the FMCG sector, Morrison said, “Retailers will be pleased to see a slight increase in the rate of growth in the sector in Q3, largely boosted by the big sporting events over the summer.
“With the gap closing between branded and own-label items, shoppers are open to spending on certain items.
“However, building financial resilience remains a challenge for consumers.”
He concluded, “According to GfK’s Consumer Confidence Barometer, a quarter of consumers reported they were ‘just managing’ at the end of Q3, and one in three said that they were unlikely to be able to save in the year ahead.
“Shoppers, therefore, remain cautious, so as we enter the Golden Quarter, promotions across retailers are going to be key in persuading savvy shoppers to trade up.”
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