Issued By: Nielseniq

NielsenIQ (NIQ) South Africa has released its State of the Retail Nation analysis* for the calendar year of 2025, showing healthy growth in retail sales value and volume. South African consumers spent nearly R683.3bn on fast-moving consumer goods (FMCG) through traditional and modern trade channels during the year under review. This represents year-over-year value growth of 5.7%, with unit sales increasing by 6.7%.

“During 2025, South Africa’s FMCG sector showed resilience in navigating persistent headwinds such as high unemployment and low economic growth, while taking advantage of tailwinds such as a stronger rand and moderating inflation,” says Zak Haeri, managing director for NIQ in South Africa.

“We saw genuine momentum in 2025 as real wages improved and spending lifted across most categories. But the volatile geopolitical climate, a backdrop of trade tensions and spiking prices for commodities such as cocoa and coffee could challenge FMCG brands and retailers in the months to come.”

FMCG market: Snacks is still the star performer

Food, the largest category, was up 6.3% to nearly R246.4bn for the year and saw a 5.9% sales volume increase. The fastest-growing segments for the full year were non-alcoholic beverages (up 7.5% to nearly R96bn) and snacking (up 7.9% to R50.2bn). These categories also saw impressive sales volume growth, with non-alcoholic beverages up 7.1% and snacking up 13.5% – indicating unit sales growth over and above inflation.

Most other key categories also delivered respectable growth:

Traditional trade outperforms modern trade

The bulk of FMCG retail sales for the year – R513.2bn – went through modern trade channels such as supermarket chains, franchised grocery stores and e-commerce platforms. Traditional trade channels (which include independent superettes, spaza shops and taverns) racked up around R170.1bn in sales.

However, sales growth in traditional trade is outpacing modern trade. Haeri says: “Traditional trade has bounced back following the disruption of the Covid-19 lockdown years. Convenience is one reason for traditional trade’s outperformance during 2025. With more than 140,000 traditional trade outlets versus around 11,000 modern trade outlets, traditional traders offer unmatched accessibility, especially for shoppers in remote and rural areas.

“Traditional trade is also benefitting from a trend of households going to the shops more often, buying smaller packs and purchasing less per trip to the shops. With many traditional traders leveraging their networks to buy bulk from wholesalers and distributors, they are more price competitive with modern trade than they were before. In this context, shoppers have less incentive to travel to larger stores to make big purchases.”

Private label share dwindles as traditional trade expands

Subdued growth in the modern trade sector contributed to a slight decline in private label share of total retail sales. Excluding the tobacco and liquor categories, private labels accounted for around 17.7% of FMCG sales value in 2025, down from18.3% in 2024. Private label sales value grew 4.1% in 2025 to nearly R106bn, compared to sales growth of 8.1% the year before.

This softening in private label momentum also comes as independent and branded players ramp up promotions, innovate more aggressively and extend distribution, which all contributes to more competition on shelves.

“The exceptional growth in traditional trade is a compelling opportunity for agile FMCG brands,” says Haeri. “But winning here is a different ball game to modern trade. In modern trade, dozens of SKUs can get a fair share of the value. In traditional trade, it is a winner-takes-all dynamic. If you are not one of the top brands on the shelf, it is game over.”

2026 outlook: Turbulence ahead?

Looking to the rest of 2026, Haeri says that it would not be surprising to see consumer inflation rise again due to supply chain pressures and energy costs, particularly if the war in the Middle East is prolonged. FMCG retailers and manufacturers should ensure that they are structured to respond rapidly if headwinds emerge or tailwinds strengthen.

“You cannot predict external shocks, but you can control how quickly you respond and how resilient your supply chain is. Promotions and pack architecture are important levers in a price-sensitive market like South Africa,” says Haeri. “Winning is about managing both actual value and perceived value. Strong brands have more room to move.”

* Data is based on NIQ’s comprehensive Retail Measurement Service (RMS), which is the largest retail (grocery) data source in the country and the only currency used by all of South Africa’s major retailers. This benchmark data comprises more than 11,000 branded retail outlets (e.g., supermarkets and garage forecourts) and more than 140,000 independent stores (e.g., spazas and taverns) across South Africa’s nine provinces and measures more than 80% of all retail grocery transactions.

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