This archive report was first published on 17 July 2019.
Kenya's Consumer and Retail Landscape Faces Shifts ¶
Kenyan consumers are becoming more complex with tighter pockets, driving growth in groceries and kiosks, but also increasing competition in the market.
According to Nielsen's event in Nairobi, the Kenyan shopper is becoming more price-conscious, with 70% of shoppers aware of prices and more than 95% noticing price changes.
Soft drinks, fresh fruits, and chocolates are some of the categories that the Kenyan shopper will cut down on if their prices increase.
Despite the money crunch, 79% of Kenyan shoppers enjoy grocery shopping and 74% are willing to pay more for quality products.
Convenience, having everything in one shop, well-stocked, and good value for money are some of the features that stood out as important for a shopper in a store.
Speaking at the event, Nielsen East Africa MD Faith Wanderi said, 'Everyone is fighting for growth. Inflation continues to be a main concern for consumers, large traditional brands are facing challenges from smaller, more agile, regional and local players who are faster at adapting 'on the go'.'
Wanderi added, 'Given the fragmented retail landscape, manufacturers and retailers need to find their pockets of growth, deliver products and services at the right price points for their consumer and focus on innovation to break through the clutter.'
On the retail environment, the number of stores in Kenya has increased by 54% in the last five years, increasing the complexity in the market.
Traditional Trade, which accounts for 66.3% of total trade in Kenya, grew by 10.7% in MAT March 2019 vs previous year, driven by small players and local manufacturers who are expanding their reach.
Category growth is driven by value brands, speaking to the price consciousness of the Kenyan shopper.
Over 70% of FMCG transactions occur at below KES 55.
Looking at product launches, 7% SKUs contribute 90% of New Launch sales and 32% SKUs don't last beyond a year.
Brand trust, quality assurance, convenience, experience, and how ethical and sustainable a brand is, are some of the reasons consumers would buy new products.
Published on July 17, 2019.
