NIQ Retail Spend Barometer
Germany

• German consumers are keen to spend on fast-moving consumer goods, but are holding back on tech and durables products.
• The European Football Championship is expected to have a major impact on consumer spending this summer.

Consumer spending on fast-moving consumer goods (FMCG) as well as tech and durables products (T&D) in Germany rose by 3.3 percent in the first quarter of 2024 compared to the same period last year, to a total of EUR 97 billion. The FMCG market grew, while T&D products remained stable compared to 2023. Based on the second NIQ Retail Spend Barometer, the retail experts at NIQ/GfK have analyzed why these two sectors experience this difference in spending and to what impact the European Football Championship is going to have on consumer spending this summer.

Sales of food and drugstore products in Germany increased by 4.6 percent in Q1 2024 compared to the previous year. In comparison, the same figure increased by 5.9 percent in Austria and 1.2 percent in Switzerland. Consumers were increasingly willing to buy in stores again, which was reflected in a sales growth of 4.5 percent for food, 3 percent for fresh produce and 6.1 percent for near-food products (such as drugstore products). This trend was fuelled by flattening inflation, promotions by retailers, in particular discounters, a higher purchasing frequency and earlier Easter holidays this year.

With a sales growth of 0.1 percent compared to the first quarter of 2024, the market for T&D products remained stable overall, however the individual market sectors differed.

Consumers were strongly reluctant to spend in the consumer electronics sector. Many consumers have not yet started to replace products they purchased during the pandemic, with televisions particularly affected by this: They saw a decline in turnover of 14.8 percent compared to the same quarter in the previous year, with a decline in sales volume of 10.4 percent. The European Football Championship also already has an effect on these figures: Bargain hunters may still be waiting for major discounts shortly before the start of the championship, therefore refraining from buying televisions in Q1 2024. In contrast, smartphones bucked the downward trend with a sales growth of 3 percent.

Especially during high inflation periods, frequent promotions have proven themselves as an effective way of providing customers with attractive offers. Consumers are happy to take advantage of special offers: In the food sector (excluding fresh produce), 24.6 percent of all products sold in the first quarter of 2024, were sold under promotional conditions. As a cumulative 12-month comparison for the German FMCG market shows, 5.3 percent fewer items were purchased. However, at the same time household purchasing increased by 5.8 percent. In other words, consumers bought less per shopping trip, but shopped more frequently.

“Due to a higher volume of shopping in the FMCG sector, we saw a year-on-year sales increase for the second year in a row. A market-driven pricing strategy and the right promotions at the right time are important levers for retailers to provide attractive offers to their customers to remain competitive and secure margins. This trend can be observed in retail right now: Consumers are increasingly purchasing along special offers and are visiting a wider range of shops to meet their needs – no longer one-stop shopping, but rather shop-hopping.”

Oliver Schmitz, Head of Retail DACH at NIQ and GfK

2023