Brick-and-mortar store sales of fast-moving consumer goods slid $2.9 billion in the first quarter, depressed by deflationary pressures and a quirk in the calendar, but also by shifting consumer tastes.
Nielsen reported that FMCG sales declined to $199 billion in Q1 2017, with weakness across many product categories. The fact that Easter fell so late this year also contributed to the slowdown, Nielsen said.
The data parallels similar trends highlighted by market research firm IRI earlier this month, which found that unit sales of consumer packaged goods fell in the first quarter.
Both sources noted some hopeful signs amidst the poor quarterly performance. Nielsen pointed to improving employment, income and consumer confidence measures. IRI said that the rate of the unit decline slowed while heading into the end of the quarter, and the dollar value of sales, after sliding in January and February, actually edged up in March, suggesting a recovery for Q2.
But Nielsen also noted that consumers' changing preferences had a significant impact on Q1 sales. It attributed nearly half of the decline to consumers' increased focus on health and wellness, which has led more shoppers away from the center aisles of grocery stores and to the produce and deli departments instead.
Like IRI, Nielsen pointed to some signs of easing pressures for Q2, in particular noting that prices have started to rebound. But price fluctuations don't change the challenge for retailers and CPG companies to address consumer demand for healthier, fresher products.