According to Circana's latest FMCG Demand Signals report, unit sales have declined 1.1% on an annual basis (including a 1.4% decline in the fourth quarter of 2022), with unit sales unlikely to return to positive levels until the end of 2023.
Value Sales Increase
At the same time, value sales rose by 5.8% last year, adding €33 billion in sales to the sector, but this inflation-driven growth has 'masked the overall decline in volume as shoppers cut back on how much they consume', Circana said.
In the fourth quarter of the year alone, value sales increased by 10.1%, as a direct result of record inflation.
“This decline in unit sales is the clearest indication yet that demand is dragging across the largest European FMCG markets," commented Ananda Roy, Global SVP, Strategic Growth Insights, Circana. "We’re forecasting unit demand to decline sharply in food staples, where price inflation continues to be the most intense."
The study, which includes analysis of 230 FMCG categories and more than 2,000 product segments – more than 10 million SKUs overall – highlights the emergence of the 'prosumer', a more price-aware, savvy and forward-looking consumer who is seeking to adapt what they buy and how they consume.
'Ability To Buy'
"What is now becoming a ‘standard-of-living crisis is requiring shoppers to change how they try, buy and use everyday items," Roy added. "In fact, a staggering 86% of European shoppers have reported changes to their ability to buy and willingness to pay being stretched.
"As a result, many are having to adopt a strategic approach to their shopping – making tough decisions and only based on needs. They are no longer sleep walking into the store and getting their heads turned by impulse buys and clever marketing promotions."
On a category level, Chilled & Fresh, Ambient foods, Beverages & Personal Care fuelled 2022 category growth, but a -3.4% decline in Alcohol sales marginally offset gains.
Circana will launch its full FMCG Demand Signals report on 10 May.