South African consumers have spent R214 billion on Fast-Moving Consumer Goods (FMCG) and Technology & Durable products in the third quarter of 2024, representing a year-over-year growth of 4.1%. This is according to new insight from the NIQ Retail Spend Barometer, which has been drawn from GfK – an NIQ company – intelligence and measures the turnover in sales of FMCG and non-food consumer products sold in retail stores nationwide.
The NIQ Retail Spend Barometer provides a complete overview of South African spend for the FMCG sector (ambient and fresh food and drink, healthcare, toiletries, homecare and general merchandise) and for the Tech & Durables sector (technical consumer goods, household appliances and DIY). This cross-category and cross-channel overview is based on real sales data and is published on a quarterly basis to illustrate household spending priorities.
FMCG growth slows, but so does inflation
FMCG sales value growth decelerated from 6.5% in Q3 2023 to 4.5% in Q3 2024. However, annual inflation dropped to 3.8% in September 2024, marking its lowest point since March 2021*. Lower transportation costs, following recent decreases in the fuel price, are a major contributor to slower price increases. However, despite the recent declines, fuel prices remain high.
Frozen Food (up 7.4%) and Fresh Food (increasing 9.1%) were the FMCG categories that experienced the highest growth.
“With the pause in loadshedding, consumers continue to gradually increase their spending on perishable goods,” said Nikki Quinn, Retail Lead at NIQ South Africa. “This trend is set to continue as it appears unlikely that we will see the return of high levels of load shedding during the summer months.”
Tech & Durables market sees intentional spending
The Tech & Durables market grew 2.1% in Q3 2024 compared to the same period in 2023. The home appliance market was the star performer, with growth of 9.9%. Washing machines, dryers, refrigerators, and small appliances such as air fryers performed well. The market was boosted by fierce pricing competition and online shopping. The technical goods segment registered a decline of 0.3%, an improvement over the 4.4% drop in value in Q3 2023.
Supply chain disruptions and economic uncertainty continued to affect tech product availability and prices. Products like routers, desk computing, and soundbars saw growth, while wearables, headphones, and smartphones declined. The DIY & Home Improvement segment saw a strong turnaround from last year’s negative growth, representing normalisation of this market following a pandemic boom and post-pandemic drop.
“The first three quarters of the year offer reason for optimism, with steady improvements to consumer confidence and spending,” said Quinn. “However, shoppers remain cautious and intentional. We are seeing more considered purchasing, particularly within Tech & Durables, as consumers opt to replace products when they must and seek out the best deals rather than rushing to buy the latest model. We enter the crucial Black Friday, Christmas shopping and Back to School periods with consumers feeling better about their personal finances and retail sales showing signs of improvement.”
* Source: https://www.statssa.gov.za/publications/P0141/P0141September2024.pdf