FMCG sales predicted to recover this Ramadan, food delivery services set to rise

FMCG sales is expected to recover in Malaysia this Ramadan, due to relaxation in restrictions and consumers being allowed to gather on a slightly larger scale compared to last year. In 2020, statistics from NielsenIQ showed that sales in Ramadan-related categories dipped by 3%, marking the first festive decline since 2017 due to the impact of stockpiling prior to Ramadan, as well as movement restrictions. That said, FMCG sales for Ramadan typically spikes by up to 15% in Malaysia, 30% in Indonesia, 20% in Turkey, 11% in the Kingdom of Saudi Arabia and 6% in UAE compared to normal retailing weeks. 

At the same time, a rise in home cooking and food delivery services is expected in Malaysia this Ramadan and Hari Raya, since there are limits on gathering sizes and health-conscious consumers will prefer to dine at home rather than eat out.

Based on this, the rise in in-home baking of Raya cookies and kuih will drive sales in baking-related categories such as chocolate, cream cheese, margarine/ butter, cooking mixes and milk, Luca De Nard, MD of NielsenIQ Malaysia and sales leader of Southeast Asia, said.

Also, cost-conscious Malaysians will be seeking value-for-money deals. Hence, retailers and manufacturers should ensure they promote items in the right way, at the right location and at the right price.

"Given that many people are still working from home, consumption has shifted away from urban centres to residential areas. Therefore it is important that popular Ramadan categories are available in stores that are close to residential areas," De Nard said. He added that Malaysians are also curious consumers who are always looking for new and exciting experiences, and Ramadan-Raya is a good time to release new and innovative products that are moderately priced and meet shoppers’ need for affordability.

The pandemic has also impacted consumers differently and NielsenIQ said spending is driven by four distinct consumer groups. Newly constrained, existing constrained and cautiously insulated consumers are streamlining their budgets and have become more discerning about what, where, when and how they purchase products. Conversely, unrestricted insulated consumers do not feel the need to watch what they spend.

In Malaysia, Turkey, and UAE, constrained and cautiously insulated consumers make up 97%, 99% and 98% of the population, respectively. NielsenIQ said this indicates that manufacturers and retailers must adjust their offerings and promotions to take into account this segment, while also catering to the insulated consumers who may want to use freed up budgets to indulge in more premium offerings.

To win consumers' hearts, Didem Sekerel Erdogan, SVP, intelligent analytics, Asia Pacific and Eastern Europe, Middle East and Africa said promotions and messaging should also reflect consumers’ realities.

"Promotions that work differ across countries and also across categories. There is no magic one-size-fits-all formula that works, and price cuts are not always the best promo mechanism that shoppers respond to," he explained. Malaysians, for example, respond to banded promotions, while Indonesian shoppers respond to price discounts.

Malaysian retailers can also attract Malaysian consumers by create DIY meal kits containing ingredients that shoppers can either buy in-store or have delivered to their home. This is to target those who wish to avoid crowded Ramadan bazaars but still aim to recreate their favourite Ramadan dishes at home.

Photo courtesy: 123RF

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