Inflation: FMCG transaction quantity in Nigeria declines by 17.4% in 2024 – Report
The most recent report by NielsenIQ has revealed that the Nigerian Quick-Shifting Client Items (FMCG) market has seen a 17.4% decline within the quantity of transactions this yr as Nigerians proceed to battle with the excessive price of products.
The report, which measured the market’s efficiency and shopper behaviour as of March 2024, indicated that the quantity of transactions out there plunged farther from the 4% decline recorded in 2023.
NielsenIQ within the report famous that the market now faces a frightening problem with the declining buying energy of the shoppers as they grapple with rising inflation.
As of June 2024, Nigeria’s inflation stood at 34.2%, forcing Nigerians to proceed to pay extra for much less.
Development amid challenges
Nevertheless, NielsenIQ noticed that regardless of the difficult market circumstances, the FMCG market’s worth has grown, rising by 21.6% in 2023 and additional accelerating to 24.8% in 2024.
“This means that whereas shoppers are shopping for much less, they’re spending extra on important items, driving up the general worth of the market,” stated Affiliate Director of West Africa at NielsenIQ Joyce Nwachukwu stated.
The report additional revealed that the cost-of-living disaster is devastatingly impacting Nigerian shoppers, with 81% of respondents surveyed reporting that they’re worse off this yr than final.
The principle drivers of this disaster are rising prices, notably gasoline and meals, and the {economic} slowdown.
Leveraging innovation
In response to the report, an evaluation of information from the house care, private care, confectionery & snacks, non-alcoholic drinks, and meals industries, discovered that producers with rising innovation gross sales had been a mean of 1.8 instances extra more likely to see total gross sales progress regardless of the present {economic} challenges.
Dwelling care and private care producers noticed probably the most important affect, with innovation boosting gross sales by 4.2 instances and a couple of.9 instances, respectively.
Opposite to the extensively held assumption that innovation success charges hover between 5% and 15%, the examine discovered that innovation vitality is considerably greater throughout varied FMCG classes.
The analysis, which analyzed over 60,000 improvements spanning 4 or extra years confirmed 52% of improvements led to gross sales progress within the second yr in comparison with the primary.
This discovering challenges the standard knowledge surrounding innovation within the FMCG business and underscores its vital function in driving enterprise success.
Commenting on the findings, Head of Innovation Insights (BASES), East & West Africa at NielsenlQ Bayonle Oseni, stated:
“By prioritizing innovation and investing in analysis and improvement, companies can unlock important progress alternatives. Understanding the various ranges of innovation vitality throughout totally different classes will allow corporations to allocate sources successfully and maximize their probabilities of success.”
Additionally talking, Managing Director of NielsenIQ (East and West Africa), Religion Wanderi, stated companies want to know shopper behaviour and the shifts which have occurred to make knowledgeable selections on whether or not to vary worth technique, model extension or give attention to distribution focused at shoppers.
She famous that buyers will proceed switching manufacturers as they don’t seem to be loyal to any manufacturers at the moment, however producers can get your hands on methods or moments to connect with them by varied revolutionary methods like providing greater or smaller sizes of their merchandise amongst different choices.
What it is best to know
Nigeria faces probably the most extreme price of dwelling disaster in a era as inflation reached 34.19%- the very best in 28 years with meals inflation crossing over 40% as of June 2024. The spike in inflation was triggered by the removing of the petrol subsidy in Might 2023 and the devaluation of the naira by over 100% since June 2023 by the Central {Bank} of Nigeria.
- To deal with the disaster, the federal authorities has rolled out social intervention packages corresponding to money transfers, low-interest loans for companies particularly producers, and grants to MSMEs and others.
- The federal authorities has additionally authorised a greater than 100% improve to the minimal wage however many Nigerians proceed to lament the ineffectiveness of this intervention which spurred “Starvation Protest” final week throughout the nation.
