The FMCG segment in the Netherlands saw an overall sales decline of 0.2% in the second quarter of 2024, according to the latest NIQ Retail Trend Barometer.
This decline follows the implementation of the Dutch government’s legislation to end tobacco sales at supermarkets as of 1 July 2024.
Excluding tobacco, the FMCG segment registered growth of 1.8% compared to the second quarter of 2023, data showed.
A much larger decline in the sales of tobacco products in supermarkets has been forecast for the second half of the year when the legislation will officially be in place.
Summer of Sports
Promotional activities around the European Championship boosted the FMCG as well as the T&D (Tech and Durables) segments during the second quarter.
Larger Technical Consumer Goods (TCG) and popular snacks saw elevated demand, meeting retailers’ expectations for the Summer of Sports, NIQ noted.
In the FMCG category, there was high demand for products such as chips or Bitterballen/Minis, which can be prepared in a deep fryer.
However, rainy weather resulted in a noticeable decline in demand for other product categories such as gardening supplies, the study noted.
In the FMCG category, sales of products typical for the early summer months lagged in comparison to the previous year, with ice cream seeing a 6% decline; while suncare products such as sunscreen, sun spray, or after-sun care products registering a 18.9% fall.
Other Observations
Despite a general trend of declining volumes and higher prices driven by inflation, the latest quarter saw less extreme changes compared to previous years, according to the report.
Confectionery emerged as one of the categories that bucked this trend to report positive volume and value growth, driven by chocolate and other items.
Elsewhere, the dairy segment, despite a decline in value, experienced volume growth, with some products showing a lower average price in the second quarter compared to the previous year.
Formula For Success
The Netherlands is exhibiting a differentiated market environment as it recovers from several crises in a row, including COVID-19, inflation, and Russia’s invasion of Ukraine.
According to Jasper Bins, retail vertical director of Benelux at NIQ and GfK, retailers need to focus on assortment, price and promotion to achieve success in such a market condition.
“Especially promotion has become a substantial factor during the last years since consumers have learned to watch and actively search for promotions when purchasing,” Bins added.
He emphasised the role of big promotional events like Black Friday in the second half as consumers are expected to hold back on shopping before these events.
“Retailers will need to participate with interesting offers – but still balance them with other factors, especially the standard price during the rest of the year to protect their margins,” he explained.
