Posted onAugust 23, 2013
An historical comparison of food and non-food retail sales provides an insight into the evolving habits of the Chinese consumer. Over the past five years, non-food sales have gradually overtaken food sales in terms of value. This
reflects a move away from essential purchases (typically fresh market produce required for day-to-day living) towards desired purchases (more expensive durable consumer goods for China’s growing number of urban households).
The slower rate of growth in food sales also underlines a growing tendency amongst China’s emerging urban middle class to buy fewer groceries and to eat out more – thus contributing to food services, which are not included in food retail sales. Average food price indices have also remained slow in growth, adding to the slow value growth rate.
Retail food sales have consistently declined as a proportion of total retail sales – thanks largely to higher disposable incomes and an increasing tendency to eat out. Although the value of average weekly grocery shopping
is higher than ever, the contents of shopping baskets have changed. Local consumers are now buying more packaged and processed foods, which command higher prices. However, the major development in spending has been in fast-moving consumer goods (FMCG) sectors such as clothing, footwear, personal products – cosmetics, eyewear and jewellery – and durable goods such as mobile phones. Furthermore, consumers are spending more on big-ticket items for the home: such as personal computers, DVD players, white goods, electronic toys and home furnishings.