If we look at the food and beverage categories, the value growth was +7.3%, while the volume growth was +2.3%. In the case of cosmetics and chemicals, the value dynamics is no longer double-digit: +9.8% (compared to +11.8% for MAT ending in Q1 2024), while the volume growth is already +2.0%.
Not only more expensive, but also more
– The first half of 2024 brought a long-awaited turnaround and good economic conditions for the Polish FMCG industry. Slowing inflation led to an increase in consumer optimism, which translated into an increase in the sales volume and consumption of FMCG goods. In the first two quarters of 2024, the average price per volume in the entire FMCG basket monitored by NIQ increased by 3.6% compared to the same period in 2023.
The impact of the extraordinary price competition between the two leading discount chains – Biedronka and Lidl – on the Polish market cannot be underestimated. Over the last two quarters, there was a significant difference between the price dynamics of discounters and other retailers: discounters recorded almost flat prices with an increase of only 0.5% in the entire FMCG basket, in contrast to other channels (excluding discounters) with a more significant average price increase of 5.3% – adds Karolina Zajdel-Pawlak, Managing Director of NielsenIQ Poland.
Frozen foods grow the fastest
The categories that recorded the highest volume dynamics in the analysed period were frozen food (+8.3%, including in particular frozen fruit and ice cream), non-alcoholic beverages (+4.3%, iced coffee, energy drinks, water) and dairy products (+3.8%). The largest volume declines were again recorded by alcoholic beverages (-2.1%), including the largest categories of beer (-2.2%) and vodka (-3.2%).
In the case of chemical and cosmetic categories, high volume dynamics are observed for categories such as color cosmetics (+37.1%), lip makeup (+23.4%) or sun care (+14.7%). A significant increase in volume dynamics can also be seen in the largest cosmetic categories such as facial care (+12.3%) or shower gels (+8.4%). However, we still observe a certain stagnation in the volume growth of household chemicals – detergents (0%), dishwasher products (+3.4%), fabric softeners (+0.5%).
Consumer sentiment up
The positive trend of consumption growth is also reinforced by the situation in terms of consumer sentiment – Poland has not had such a good half-year for years. For 6 months, the indicator remained at an almost unchanged level, but consistently "above the line". Stabilization is very good news for the trade sector and companies that plan sales in the second half of the year.
The GfK Consumer Sentiment Barometer – An NIQ Company, a synthetic indicator illustrating the current mood of Poles in terms of consumer attitudes, amounted to 3.5 points in June 2024, which means a practically identical result compared to the previous month (a decrease of only 0.1 points m/m). Since the beginning of this year, the Barometer result has remained positive, for the first time since the outbreak of the pandemic in March 2020.
According to data from GfK – An NIQ Company, some key indicators deteriorated in June this year – for example, in terms of assessing the current financial situation and the future economic situation of the country. We assess our propensity to spend on durable goods better than a month ago and we are more optimistic about the state of our portfolios in the future. We are still observing very clear changes in the long term. A year ago, the barometer components were even a dozen or so units worse.
The best consumer sentiment is consistently found among young people (aged 15 to 29), where the index is even over 20 in the plus. For comparison, respondents from the 50-59 and over 60 age groups recorded an average sentiment index of -4.3 and -2.8 units, respectively, which is a very large improvement month-on-month.
Technological goods market
As for the technological goods market, according to data from GfK – An NIQ Company, in the first half of 2024 the Polish technological goods market reached the value of PLN 24.69 billion. This means an increase of 3% compared to the first half of the previous year, when the value amounted to PLN 23.96 billion. According to experts from GfK – An NIQ Company, this is a good prognosis after 2023 was the first year in over 10 years when the dynamics of the tech & durable market was recorded for the first time in many years.
The product categories that saw the biggest increases in sales value in the first half of 2024 included fryers, carbonated drink saturators, and electric toothbrushes. On the other hand, games consoles, hoods, and headphones saw declines.
Nothing beats the promotion
Despite the general weakening of the price growth dynamics on the FMCG market, rising food prices are still the main concern of Poles, which undoubtedly has an impact on the growing interest in promotions. In the last 12 months, we have observed a significant increase in the share of promotional sales in the FMCG basket. In the Supermarket and Hypermarket channel, the share of promotional sales for the cumulative 12 months ending in May 24 amounted to 33.3%, which means +3.2 percentage points of growth compared to the previous year. A similar trend is observed in both the basket of food products (32.5%; +3.2, percentage points) and the basket of chemical and cosmetic products (38.0%; +3.2 percentage points).
The categories that recorded the largest increase in the share of promotional sales were Dairy (+5.9 pp) and hygiene and sanitary categories (+6.1 pp).
The increase in shopper sensitivity to promotions is also visible in the price elasticity monitored by NIQ in quarterly cycles. While in Q1 2024 the regular price elasticity remains at a similar level as in Q4 2023, the promotional price elasticity increases (in the Hypermarket and Supermarket channel -1.67 vs. -1.59), which means that promotional price reductions generate higher sales than in previous periods. Therefore, the justification for investments by manufacturers and retailers in the promotion of products with high and very high price sensitivity increases.
The second quarter of 2024 brought a slight correction in the pace of price growth in the Polish economy. According to the Central Statistical Office, prices of consumer goods and services in the second quarter of 2024 increased by 2.5% compared to an increase of 2.8% in the first quarter.
NIQ is a consumer analytics company. In 2023, NIQ merged with GfK. NIQ is a portfolio company of Advent International operating in over 100 markets, covering over 90% of the world's population.
