Shoppers have turned away from branded FMCG products as sales dropped 5.1% in March compared with the same period last year, according to NielsenIQ’s latest data.
With sales of branded FMCG products going down, the share of sales for FMCG private label products has risen from 52.4% last year to 53.2% this year.
Additionally, sales of private label products in the ambient grocery category increased by 3.3% in the last four weeks, a category where branded goods dominate with a 61% share of total sales.
The news is seen as evidence that shoppers are looking to save money as they start to feel the squeeze of inflation.
“We are therefore beginning to see three trends emerge. The first will be more spending on private label products as this still gives shoppers choice, from economy products through to premium,” NielsenIQ UK head of retailer and business insight Mike Watkins said.
“We’ll also see an increase in ‘trading down’ of products as shoppers seek to make more savings. Finally, we’d anticipate an overall shift of spend to retailers that are perceived to offer value for money.”
“Whilst saving money on discretionary areas such as clothing and eating out are some of the immediate ways that households will economise, this does suggest there could be some impact on grocery shopping as the cost-of-living squeeze accelerates during Q2.”
Moreover, total till grocery sales fell by 4.1% over the last four weeks ending 26th March, the lowest sales growth so far recorded in 2022.
However, this figure marks the final sales growth measurement against the high lockdown comparatives, indicating a potential return to growth post-Easter and into the spring.