FMCG spending slightly rises in Q2

The latest data for the three months from April to June also showed a 4.5% fall in spending on tech and durables compared with the same period last year, and also down from -3.4% in the first quarter of the year.

NIQ data shows that value growth for the FMCG sector dropped from 6.1% in the first quarter to 1.3% in Q2, despite a boost in consumer confidence and inflation falling from 3.7% in March to 2.5% in June.

NIQ said the slowdown in growth is largely attributed to the timing of events such as Easter, the weather and promotional activity which had a bigger impact on sales in the short term.

This is reflected in the decline of certain categories such as beverages, which dropped from 5.4% rise in Q1 to a -1.5% decline in Q2, and snacking, which dropped from 13.2% growth in Q1 to 1.2% in Q2.

Ben Morrison, retail services director UK and Ireland at NIQ, said: “While growth in FMCG was flat in Q2, there are positive signs for the quarters ahead with inflation figures starting to fall.

“Moving into Q3, we do expect to see growth levels improve with FMCG value growths in the range of 2% to 3%, helped by warmer weather. In addition, the uplift from Euro 2024 and potentially the Paris Olympics should help to provide the feel-good factor missing in Q2 and give a boost to industry sales.” 

Morrison added: “In terms of tech and durables, it remains a challenging market. Gone are the days of longer term, more considered purchases.

“Consumers today are choosing to make purchases based on what they need in the moment – such as new luggage for holidays or new TVs for the Euro 2024 matches. Moreover, they are buying less but buying better.”