By Sinazo Mkoko
Despite inflation and tough economic times that South Africans are facing, the Fast-Moving Consumer Goods (FMCG) retail sector has 13.4% growth, largely driven by higher prices versus consumption growth, according to NielsenIQ State of the Retail Nation analysis.
NielsenIQ (NIQ), one of the country's market research company stated that interesting shifts are shaping the South African FMCG sector (including liquor and tobacco) that is "now worth R593-billion in annual sales (at the end of March 2023)—a 13.4% increase from the previous 12 months."
A thorough analysis of the inflation pressure areas within FMCG during the last 12 months was conducted by NIQ, and it was revealed that cooking oil experienced the highest annual inflation rate (into Q1 2023), having experienced a 40% increase. "It remains the biggest contributor towards overall net FMCG inflation, contributing a 7.2% share of inflation even though it accounts for less than 2% of total sales.
"Interestingly, the full effect of these massive cooking oil price increases has created a change in consumer consumption patterns around this product. In response to the price increases, volumes purchased have dropped steadily over the last 3 quarters, indicating that consumers are curtailing their usage of this product despite its essential nature."