Consumers spent €4.3 billion more on fast-moving consumer goods (FMCGs) at grocery retailers across the nine major Western European markets in 2016 than in 2015 – a growth of 0.9%. Fresh foods accounted for €1.6bn (38%) of the overall growth, followed by confectionery/snacks (€1.0bn, 23%) and alcoholic beverages (€849 million, 20%). Consequently, these three categories alone accounted for 80% of increased grocery spend in 2016.
In the UK, fresh meals, sparkling wine and beer were the sub-categories contributing most to the grocery sector’s growth in 2016. Mike Watkins, Nielsen’s UK head of retailer and business insight notes that, “category growth generally follows a change in consumer tastes, such as sparkling wine, whilst a fall in a category’s sales value is often the result of deflation or a very competitive retail landscape, such as is happening in fresh meat and cereals.”
Who’s driving the growth?
Manufacturers outside the 10 biggest players accounted for 70% of the growth in the Western European grocery market, whilst retailers’ own label brands accounted for the other 30%. The Top 10 saw a €430 million decline in consumer spend.
Manufacturers outside the top 10 now have a 46.6% market share, followed by own label (36%) and the Top 10 (17.4%).
Half of the growth (€2.2bn) in the overall grocery market was due to promotional items which“retailers increasingly used in 2016 to great success to encourage shoppers to add more items to their shopping baskets which was a major factor in the sector’s growth.”