Consumption Trends

During Challenging
Times

Consumer Wallet 2022

Household Panel / Modern Trade Panel

Kantar Lanka Pvt. Ltd

December 2022
Household Panel
A continuous panel representing all
Sri Lanka to capture the monthly
purchases for over 60 FMCG product
categories. This Panel aims to
determine market trends and
provide diagnostics for in-home
FMCG products
Modern Trade Panel
Dynamics in consumer spend
patterns and changes in FMCG
buying behaviour with special focus
on Modern Trade
Consumer Wallet 2022-23
A syndicated study (~ 2000
households) that reveals an in-depth
understanding of how Sri Lankan
households manage their income and
expenditure
2
 70%,
With inflation at ~
the Sri Lankan consumer is compelled to
make their ends meet through various
coping mechanisms

3
57,000 LKR 50%
of the income through
Monthly Household Income Salaries

128K
32%
Daily Wage Earners
66K SEC A : 8%
51K
42K SEC B : 25%
34K
SEC C : 34%
SEC D : 41%
SEC A SEC B SEC C SEC D SEC E SEC E : 43%

** Note : Income is often understated and mainly refers to cash income

Source: Kantar Consumer Wallet 2022 4
 Savings & Beauty & Personal
Other expenses
Investments Care
Dining out, Take away
Insurance
Utility payments - Groceries
telecommunication
Gas

Textiles & Apparel

Transport
LKR 61,000
1/3rd of their average
monthly expenditure is on
Utility Payments average
- water and Groceries, which saw a
electricity, Pay
TV etc
household
Health Care
expenditure
~60% increase
Meat, Poultry, Fish,
Egg etc. Fuel

Vegetables & Fruit

Loans, Leasing, etc Education

Source: Kantar Consumer Wallet 2022 5

 44%
increase in all monthly expenses
Gas 91%
Health Care
Increased spends on
Transport most has compelled
Water and electricity, Pay TV, etc
Fuel consumers to
Groceries
Telecommunication phone voice and data
deprioritize spend on
Beauty and Personal Care other categories
Tobacco
Dining out or Take away
Alcohol
Textiles and Apparel
Leisure Activities
Purchase and Maintenance of Durables
Savings and Investments -29%

Average spend growth 44%

Source: Kantar Consumer Wallet 2022 6

 SEC A 18
% of households involved in savings & investments

10

SEC B 13
6
Currently only

SEC C
7
9
6% households are into
savings and investments
SEC D
6
9 which is a

SEC E
4
7
40% drop from last year
2021 2022

Source: Kantar Consumer Wallet 2022 7

72%
increase in Health care
expenses

Expense on education saw an

increase of 40%
Source: Kantar Consumer Wallet 2022 8
On average a household spends Rs.1600 on
communication monthly, , which shows an

increase from 40% YOY

48%

46%
43%
30%
31%

SEC A SEC B SEC C SEC D SEC E

2021 2022

Source: Kantar Consumer Wallet 2022 9

Rs.13,000 Rs. 21,000
in 2021 in 2022
an average household expenditure on Groceries

37,300

SEC A 45%
23,500
SEC B 62%
19,100 Rs. 21,000
16,500 (Average
14,700 expenditure) SEC C 62%

SEC D 60%

SEC E 55%

SEC A SEC B SEC C SEC D SEC E Growth in Grocery expense

Source: Kantar Consumer Wallet 2022 10

 67%
Households claimed having reduced
Quantity of FMCG products purchased
such as packaged foods, dairy products,
baked goods

Source: Kantar Consumer Wallet 2022 11

Impact on FMCGs
Both urban and rural consumers were impacted -
Higher rate of decline among Rural HHs
FMCG Growth Quarter vs. Same period Last Year
41

28
24
18 18 19
23
8 16 9
5 15 15 6 6
5
1
-5 4 4 3
-6 1
0 -2
-4
-8 -7
-12 Urban Rural
-22 -20 -23

Q1'19 Q2 Q3 Q4 Q1'20 Q2 Q3 Q4 Q1'21 Q2 Q3 Q4 Q1'22 Q2 Q3

Volume Growth % Value Growth %

Source: Household Panel, Kantar Worldpanel 12

 Households have reduced interaction with many
categories Upper SECs had a greater drop

% of Households that bought 25+ FMCG categories - across SECs

48
Q3'21 Q3'22
42

35
33
28
26 25
22
18
17
13
11

ALL SEC A SEC B SEC C SEC D SEC E

Source: Household Panel, Kantar Worldpanel 13

17 out of 50 categories
saw more than half a million (500k) HHs lapsing from
each category

000 HHs 000 HHs

Tinned Fish (1,272) Malted Milk (656)
Milk Powder (1,097) Cheese (616)
Regular Noodles (891) Sanitary Napkins (578)
Toilet Cleaners (878) Hand Wash (556)
Yoghurt (850) Fabric Softeners (537)
Butter & Margarine (815) Soup Cubes (513)
Shampoo (809) Ice Creams (513)

Q3'22 vs. Q3'21

Source: Household Panel, Kantar Worldpanel 14

 Consumers reduced consumption of
average consumption of essentials

Average Consumption – Growth/Decline

Q3’22 Vs. Q3’21

Biscuits -26%

Toilet Soaps -17%

Salt -13%

Tea -11%

Toothpaste -11%

Soya meat -8%

Source: Household Panel, Kantar Worldpanel 15

 High price increases eroded brand
loyalty- Solus buyers trying out other brands

Avg. Price Increase Q3'22 vs. Q3'21 Avg. Price Increase Q3'22 vs. Q3'21

Washing Soap 175% Milk Powder 143%

Washing Powder 164% Malted Milk 141%

Utensil Cleaners 143% Biscuits 135%

Toilet Soaps 179% Spice Powders 132%

Shampoo 148% Regular Noodles 107%

Toothpaste 99% Instant Noodles 97%

Sanitary Napkins 98% Soup Cube 96%

Loyalty based on top 3 brands

Source: Household Panel, Kantar Worldpane 16

Buying behavior has shifted, purchases at
modern trade has increased
Sathosa contributes to 24% within the main Supermarket chains

2% 3% 13%
13% 18%
15%

2021 2022

66%
70%

Whole Sale Grocery Modern Trade Others Whole Sale Grocery Modern Trade Others

Time Period: Q3’21 Time Period: Q3’22

Source: Modern Trade Panel, Kantar Worldpanel 17

23% SEC A
of the Sri Lankan households
~40%
shop at Modern trade monthly
SEC B
~35%

SEC C
~25%

Urban Rural SEC D

~30% 15% 15%

SEC E
Monthly Penetration - %
10%

Source: Household Panel, Kantar Worldpanel 18

Modern Trade shoppers spend
25% more on Groceries
compared to the all shoppers

53%
increase on Grocery spend among Modern
Trade Shopper

Source: Kantar Consumer Wallet 2022 19

 Over the years, branded FMCG contribution of
Modern Trade purchases continue to increase

1.4 Mln HHs

18%
(23%)
purchase from Modern trade
15% 15% within a given month

12%
11% 680,000 HHs
(11%)
Heavy Modern
Trade buyer HHs

MAT'18 MAT'19 MAT'20 MAT'21 MAT'22

FMCG Contribution Heavy Modern Trade Buyer: HHs with more
than 50% of their monthly spend on Branded
MAT – October to September (12 months) FMCGs are from Modern Trade outlets

Source: Modern Trade Panel, Kantar Worldpanel 20

 Heavy Modern Trade buyers also reflects some
reduction in volumes

FMCG Volume Growth Heavy MT

All buyer Others
/Decline Buyer

Annual Volume
(MAT 22 vs MAT 21)
ALL -9% -4% -10%

Recent Quarter
(Q3'22 vs Q3‘21)
ALL -21% -18% -21%

Out of ~50 Categories

MT saw lesser Decline 50%

MT saw Growth 33%
MT saw Higher Decline 11%
MT saw Similar Decline 7%

Source: Modern Trade Panel, Kantar Worldpanel 21

Brand loyalty was low in Heavy Modern Trade buyer’s
basket - especially for branded F&B categories
Dual / Multiple Brand buyers %
86
74
68 70
62
56
52 49
40 40 38
29 29 32 31
27 27
23 24 21 23 21
16 18
13 15 13
7

Heavy MT Shoppers Others

Source: Modern Trade Panel, Kantar Worldpanel 22

“Instead of worrying about what you
cannot control, shift your energy to what
you can create.” ― Roy T. Bennett

23