Understand the state of the FMCG industry in Western Europe
After two years of the pandemic, Europeans have experienced a shift in focus from Covid-19 to other pressing issues such as the war in the East, extreme weather events, and record high inflation rates. Despite lower inflation compared to other regions, Western Europe has witnessed a rapid acceleration, impacting consumer purchasing power, according to data from NIQ’s Retail Measurement Services (RMS). Utility bills have nearly doubled for residents in major European capitals while wages struggle to keep up with inflation. Consequently, FMCG volumes have declined, and consumer sentiment remains pessimistic, with a majority perceiving a recessionary environment.
In this challenging scenario, purchasing behavior has shifted towards smaller and more frequent shopping trips, as consumers seek better price options. Retailer-manufacturer negotiations have become more demanding, with retailers aiming to control prices while manufacturers face rising costs. Private labels and smaller manufacturers have found opportunities to secure retailer margins, while branded products face significant challenges.
Despite these obstacles, sustainability and self-care trends continue to present growth opportunities. Furthermore, as commodity prices show signs of deceleration, there is optimism for a rebound in consumption and a more favorable pricing landscape.
NIQ’s FMCG Pulse report provides the Full ViewTM of the FMCG landscape including manufacturers’ trends, market-level data and insights to help you strategize in 2023.
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