NIELSEN IQ - NIQ 2023 Consumer Outlook - Roadmap To Growth (23jan2023)

NIQ 2023
Consumer Outlook
Roadmap to growth
in disruptive times
NIQ Global Thought Leadership
1
© 2023 Nielsen Consumer LLC. All Rights Reserved.
Contents
1 Understanding the
disrupted consumer
of 2023
2 Recession Track:
Follow the money
3 What’s Next
2
1
Understanding the
disrupted consumer of 2023
Mapping consumer intentions
across the globe.
3
Hopeful
The state of Unsure about the future and bracing for

extremes, consumers are in a constant
Guarded
state of skepticism. Volatility in
consumers is everything from prices to weather events,
has signaled a year of safeguarding,
unsettled action-planning and hopeful strategizing

around socio-economic hurdles.
Financially-focused
4
of global consumers say they are in a
39% worse financial position this year
>> vs. 37% in Mid ‘2022
“In line with figures of mid-year 2023, consumers feel financially

pressured compared to a year ago, but resilience is evident.
Despite inflationary highs and global wage lows, there is a

strong majority who are prioritizing and spending on
categories they feel will propel them ahead in the long-term.
A prevailing sentiment for survival signals cautious,

financially-focused decisions into 2023 – particularly among
the most vulnerable global consumers today.
Lauren Fernandes
Global Director, NIQ Thought Leadership
Source: NielsenIQ 2023 Consumer Outlook Survey vs. Mid-year Outlook July 2022
Note: 2023 study includes enhanced coverage of 6 additional markets; slight variance between comparisons to Mid ‘22 as a result
55
Globally, many consumers are financially
worse off due to…
The economy High costs COVID-19
 IMPACTED by  BURDENED by  ADAPTING to

economic slowdown increased costs of ongoing pandemic
living disruptions
 42% worse off due to  Only 32% worse off

economic slowdown  74% worse off due to due to ongoing
(vs. 31% Mid ‘22) increased costs of pandemic conditions
living (vs. 63% Mid ‘22) (vs. 41% Mid ‘22)
66
Complex fallout after consumers live through recent inflation highs
Wages and spending cuts likely to linger across the globe
Negative global wage growth Inflation may be past its peak

For the first time this century, global monthly wages fall CPI forecast projections
CPI Forecast
Global Global excl. China
17.0
3.5 16.0
15.0
3 14.0
13.0
12.0
2.5 11.0
10.0
2 9.0
8.0
7.0
1.5 6.0
5.0
1 4.0
3.0
2.0
0.5 1.0
0.0
0 -1.0
2023-Q4
2023-Q4
2023-Q4
2023-Q4
2023-Q4
2023-Q4
2021-Q4
2021-Q4
2021-Q4
2022-Q4
2021-Q4
2022-Q4
2021-Q4
2021-Q4
2022-Q4
2022-Q4
2022-Q4
2022-Q4
2019-Q4
2019-Q4
2019-Q4
2019-Q4
2019-Q4
2019-Q4
2020-Q4
2020-Q4
2020-Q4
2020-Q4
2020-Q4
2020-Q4
-0.5
-1
-1.5 Australia China United Mexico Poland United
Kingdom States
-2
Source: ILO Global Wage Report 2023-2023 | OECD inflation forecast. AE+ Advanced economies. EMDE = Emerging markets/developing economies
7
Rising prices are a global concern across countries
% change November ‘22 average CPG price
+7%
Canada
+11%
United +14%
Kingdom Germany
+10% +22%
France Poland
+12% +12%
+13% +123% +9%
United States Italy
Spain Turkey India
+15%
Mexico
+25%
Colombia
Global: +13% +16%

+9%
Brazil
New Zealand
+90%
Argentina
> 5% < 130%
Source: NielsenIQ Global Price Tracker November ‘22

8
Intense financial polarization in many markets
Better off financially Same as before Worse off financially
Global 26% 35% 39%

Indonesia 53% 29% 18%
China 48% 36% 16%
India 45% 6% 49%
Brazil 39% 33% 28%
South Africa 38% 21% 41%
Colombia 35% 45% 21%
Thailand 34% 27% 39%
Saudi Arabia 33% 38% 30%
Egypt 25% 33% 41%
Mexico 24% 44% 32%
Singapore 22% 38% 40%
US 21% 39% 40%
Turkey 19% 25% 57%
Chile 17% 35% 48%
Canada 15% 43% 42%
South Korea 12% 49% 40%
Australia 12% 42% 47%
UK 11% 34% 55%
France 11% 54% 36%
Spain 10% 45% 46%
Poland 10% 33% 57%
Germany 9% 32% 59%
Italy 8% 56% 36%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: NielsenIQ 2023 Consumer Outlook Survey

Q. Compared to a year ago, would you say that overall your household is better off, the same, or worse off financially?
9
46% 46%
Mental Financial /
wellness job security
Setting the
spending tone Maintains 1st rank Up from 5th rank
for 2023
vs. Mid ‘22 vs. Mid ‘22
What’s more important to

consumers in 2023?
46% 44%
Physical Saving for
wellness unforeseen
circumstances
Up from 2nd rank Maintains 4th rank

vs. Mid ‘22 vs. Mid ‘22 10
40%
Food and grocery prices
34%
Setting the Utility costs

22%
23%
spending tone
for 2023
20%
Economic downturn
17%
Top consumer concerns 16%

COVID-19
19%
11%
Fuel and transportation costs
16%
2023 Mid 2022
Source: NielsenIQ 2023 Consumer Outlook Survey vs. Mid-year Outlook July 2022 - Note: 2023 study includes enhanced coverage of 6 additional markets; slight variance between comparisons to Mid ‘22 as a result
11
2
Follow the money
2023
Assessing global spending shifts amidst a
pending recession.
12
Recessionary mindset The global majority feeling constrained by recession
Current impressions Future outlook Spending reality
62% * 48% * 38%

Take they
think own/use
are currently living Minimize electricity
expect to be in a recession only have enough for food,
reusable bags usage
in a recession for 12+ months shelter, basics
vs. 59% in Mid ‘22 vs. 49% in Mid ‘22 vs. 23% in Mid ’22
Source: NielsenIQ 2023 Consumer Outlook Survey vs. Mid-year Outlook July 2022, *excludes China,
13
Hotspots of recession according to global consumers
% respondents who currently feel their country is in a recession
63%
Canada
84%
United 61%
Kingdom Germany
64% 60%
France Poland
59% 70%
67% 89% 77%
United States Italy 89%
Spain Turkey India South Korea
66%
46% Egypt
Mexico
41% 54%
Saudi Arabia Thailand
+56%
Colombia 43%
Indonesia 43%
Singapore
75% 49% 49%

Chile Brazil Australia
70%
South Africa
> 50% < 80%

14
Wallet shifts during a pending recession
CPG categories central to 2023 consumer spending intentions
Spending less Same as before Spending more

In home Financial Savings / Paying off
OOH
Dinning / Eating 44% entertainment services Investments debt 38% Utilities
48% 47% 41% 41%

37%
Grocery & household items

Fresh produce
OOH
Entertainment 41%
32% Fresh meat
Clothing /
Apparel 40% 31% Health & wellness
36%
31% Dairy
Food delivery /
Takeaways
37%
Transportation
35% costs
Home improvement /
Decor
36% 29% Education

Interpreted as: “44% of global respondents plan to spend less on Out-of-home (OOH) Dining and Eating”
15
Many categories see strong sales growth
year-over-year
5.9% Global* Trend Global* sales

growth +5.9%
Beverages 7.1% with 4 out of 12
Fresh food 4.6%
categories
outpacing the
Ambient food 7.7%
global* average
Frozen food 5.7%
Snacking 10.8% Pet Care remains
Dairy 5.7% the fastest
Petcare 11.2% growing category
Home care 2.7% at 11.2%, followed
Personal care 5.3% by Snacking at
Baby care 1.8%
10.8%.
Paper products 5.6%
Source: NielsenIQ Retail measurement services, FMCG (Fast Moving Consumer Goods), latest annual period ended Q3 2022,
Category measures based upon global read of the following: Tobacco 42 markets, Beverages 64 markets, Fresh Food 50 markets , Ambient Food 63 markets, Frozen Food 47 markets, Snacking
64 markets, Dairy 62 markets, Petcare 48 markets, Homecare 65 markets, Personal Care 65 markets, Baby Care 63 markets, Paper Products 52 markets.
*Fact: Value % growth vs YA (unweighted)
Note: Italy and Poland excluded from Global and Regional benchmarks
16
Globally, inflation of consumer goods continues to rise.
Consumers are spending more, but purchasing less volume
Global CPG Price Inflation Rate
12.9 13.4
11.8 12.2
10.8
10.0
9.1
7.6
5.9 6.1 6.3
5.1
Dec '21 Jan '22 Feb '22 Mar '22 Apr '22 May '22 Jun '22 Jul '22 Aug '22 Sep '22 Oct '22 Nov '22
% Chg
Dollars +4 +4 +4 +5 +6 +6 +8 +9 +11 +10 +11 +11
Volume -1 -2 -2 -1 -2 -3 -2 -1 -1 -2 -2 -2
Source: NielsenIQ Global Inflation Tracker, Global measures based upon 15 markets, Nov. 2022, Eq Vol % Price Change
Markets include: Canada, US, Mexico, Argentina, Colombia, Brazil, India, Turkey, New Zealand, Germany, Italy, France, Spain, Poland and UK
17
Wallet
All forms
shifts
of discretionary
during a pending
spending
recession
under consumer scrutiny
CPG / FMCG positioned well to capture shifted demand from other areas
Spending intentions for next 12 months
net change in spending (pt. change)
Utilities 23
Groceries and household items 19 Fresh produce 24
Education - self /children's 18 Home essentials (eg. cleaning,… 16
Transport costs 16 Health & wellness 16
Rent/ mortgage 13
Childcare 12
Dairy 15
Paying off debt eg. credit cards, loans 10 Fresh meat 13
Saving/ Investments 7 Packaged groceries 9
Financial services 5 Baby products 5
In home entertainment -5
Gym/sports/club memberships -6
Pet products 5
Holidays – domestic -7 Frozen food 4
Electronics/Technology -11 Beverages (excl. Alcohol) 3
Holidays – international -12 Personal & beauty care 2
Home improvements/décor -15
Food delivery/ takeaways -17
Prepared food & meal kits -9
Clothing/ Apparel -19 Snacks & confectionery -12
Out of home entertainment -22 Alcohol -14
Out of home dining/ eating -25
Source: NielsenIQ 2023 Consumer Outlook Survey, Dec 2022

Change in spending calculated by subtracting % of respondents who are spending less from % of respondents who are spending more
18
The 2023 Economic Divide Insecurity limits spending power of consumers
Thrivers
Saved money and feel more financially
secure
9% 10%
6%
14% 13% Unchanged
12%
Not impacted and continue to spend the
same
Cautious
38% 38% 39%
Not impacted financially but are cautious
with spending
Rebounders
21% 19% 16% Experienced income or job loss but now
feel they are back on track
19% 22% Strugglers

23%
Have suffered financial insecurity and
continue to do so today
Jan 2022 June 2022 Jan 2023
Source: NielsenIQ 2023 Consumer Outlook Survey, vs. June 22 and Jan 22 editions, excludes China
Q. Which of the following best describes how current events* of the last year have impacted your overall household financial situation? *Note: Question phrased more specifically to COVID-19 impact in Jan. 2022 & June 2022
19
Deep polarization in spending intentions across the economic divide
Yet, consumers of all circumstances plan to increase CPG / FMCG spending in 2023
Spending intentions for next 12 months

net change in spending (pt. change)
Total Global Strugglers Rebounders Cautious Unchanged Thrivers
Life Expenses
Rent / mortgage, Education, Financial services,
Debt, Utilities, Savings / investments,
-11 -13 -22 -23 +17 +18
transportation, childcare
Consumer Goods
Groceries and household items +19 +15 +23 +9 +33 +41
Semi/Durable Goods
Clothing / Apparel, Home improvements / décor, -27 -22 -29 -48 +7 +12
electronics / technology
Food Service
Food delivery/ takeaways, OOH dining/ eating -27 -20 -32 -49 +3 +10
Leisure & Lifestyle

OOH & in-home entertainment, holidays, gym / -29 -22 -35 -51 +2 +8
sports / club memberships
Source: NielsenIQ 2022 Consumer Outlook Survey, Dec 2023

Change in spending calculated by subtracting % of respondents who are spending less from % of respondents who are spending more
20
A view into the most vulnerable
“Strugglers” who splurge: many feel more spending freedom than ‘Cautious’ consumers
% respondents – “I am able to spend freely”
21%
44%
29% 32%
13%
8%
Strugglers Rebounders Cautious Unchanged Thrivers
Unique Priorities - % “Strugglers” respondents
37% 33% 44%

say relationships & say location of work/study plan to stop buying or buy
emotional support is more important to less personal/beauty care
are “Strugglers” – who
is more important to them them products if prices rise have suffered financial
insecurity and continue
(vs. 34% globally) (vs. 27% globally) (vs. 35% globally) to do so today
Source: NielsenIQ 2023 Consumer Outlook Survey.

21
A look into the financially flexible
Cautious comfort: Many “Thrivers” aligned to the “Cautious” with careful spending
% respondents
10%
51%
44% 42% 39% 38% 40%
20% 17%
8%
"I spend freely" "I live comfortably" "I only have enough for basics"
% Global % Thrivers % Cautious
Unique Priorities - % “Thrivers” respondents
26% 17% 48%

are using digital technologies are opting for are prioritizing
like mobile apps to private label / store brands saving for unforeseen
are “Thrivers” – who
find better deals in order to save circumstances have enough money
saved and feel
(vs. 24% globally, (vs. 22% globally, (vs. 44% globally,
24% among Strugglers)
financially secure
23% among Strugglers) 46% among Strugglers)

22
Store brand sales steady and rising across markets
Private label share of sales over time Share Pt. Growth

vs. 2 years ago vs. year ago
Spain 43.5% +3.2 +2.2
United Kingdom 43.0% +1.0 +0.9
Germany 40.2% +0.7 +1.5
Poland 34.0% +0.5 +1.0
France 31.9% -0.3 +0.5
Italy 30.1% +1.6 +1.3
Australia 23.4% +0.3 +0.7
US 18.9% +0.3 +0.6
Canada 18.3% +0.7 +0.5
Source: NielsenIQ Global Strategic Planner, Latest 52 weeks ended Dec. 4 2022 (Dec. 11 for Australia and Dec. 31 2022 for US & Canada) vs. year-ago and 2 years ago
23
Understanding states of saving
Staking strategy around the ways consumers themselves
choose to save on expenses
This Not That

Top-ranked Saving Strategies Bottom-ranked Saving Strategies
Loyalty points over loyalty
25% 12%
Shopping at stores with Stick to my regular brands,
loyalty points irrespective of price
Value stores over valued attributes
35% 20% Prioritize

Shopping more at discount / based on
value / lower-priced stores attributes that matter most
Upsize over downsize
27% 16%
Buying in Bulk / Buying smaller sizes of
Stocking up brands to save

24
Discounters are growing importance in key markets across the world
Discount retail channel share of sales over time Share Pt. Growth
vs. 2 years ago vs. year ago
Poland 71.4% +5.2 +3.0
Canada 45.2% +2.4 +1.8
US 41.6% +2.1 +0.5
Germany 38.2% -0.9 0.0
Italy 22.5% +1.5 +0.8
United Kingdom 13.2% +1.4 +0.7
Australia 12.6% -0.1 +0.4
France 11.7% 0.0 0.0
Source: NielsenIQ Retail Measurement Services & Global Strategic Planner, Latest 52 weeks ended Dec. 4 2022 (Dec. 11 for Australia and Dec. 31 2022 for US & Canada) vs. year-ago and 2 years ago, US measures via a closed group of Value Retailers
25
2
3
What’s Next?
Assessing the implications of changed

relationships to consumption.
26
Key themes emerge from global risk assessment
Polarization & insecurity cloud the short-term, environmental risks
permeate both short- and long-term
Global risks ranked by severity, as reported by World Economic Forum
risks that are related to the environment/sustainability
Short Term (2-year horizon) Long Term (10-year horizon)

1 Cost-of-living crisis 1 Failure to mitigate climate change
2 Natural disasters and extreme weather events 2 Failure of climate-change adaptation
Natural disasters and extreme weather

3 Geo-economic confrontation 3
events
4 Failure to mitigate climate change 4 Biodiversity loss and ecosystem collapse
5 Erosion of social cohesion and societal polarization 5 Large-scale involuntary migration
6 Large-scale environmental damage incidents 6 Natural resource crises
Erosion of social cohesion and societal

7 Failure of climate change adaptation 7
polarization
8 Widespread cybercrime and cyber insecurity 8 Widespread cybercrime and cyber insecurity
9 Natural resource crises 9 Geo-economic confrontation
Large-scale environmental damage

10 Large-scale involuntary migration 10
incidents
Source: World Economic Forum Global Risks Perception Survey, 2022-2023

Q: "Please estimate the likely impact (severity) of the following risks over a 2-year and 10-year period"
27
Sustainability will be top of consumer
and corporate radar in 2023 Consumers want to be more sustainable
and two rapidly emerging drivers of
change, governance and cost will
supercharge corporate focus in 2023.
These drivers will force companies to

Role of governance Exploding costs due to the
and mandates impact of climate change
transform and commit to real sustainable
business models within the next five years
if they want to mitigate short- and long-
Financial Sustainable Rising energy term risk.
reporting Investment prices
Banks, Shift to renewables
requirements
Extreme weather events and the impact
Shareholder
SEC, EU CIBR value, Funding
of the changing climate have created a

New legislation Fines and Rising cost of Supply
E.g. French green rooves Taxes goods chain business ecosystem where existing
disruption
business models will be challenged.
Greenwashing Increased prices due to
scarcity Shifting source
Stricter governance and mandates will

of origin
Escalating
consumer demand
propel the shift to more sustainable
business models more quickly and
purposefully than growing consumer
sentiment has been able to.
Personal Availability of
impact choice
To succeed, businesses will need to
Cost of living stress Shifting values & balance and react to these drivers with
attitudes
authentic action in an environment of
unparalleled scrutiny.
Deep dive into NIQ’s The changing climate of Sustainability report

28
Key risks signal the consumer value reset of 2023
Coming soon: NIQ to highlight the changed ways in which
consumers define and seek value
Less More
Example product / brand purchase factors:
interest interest
Health & wellness values:

▼11% ▲33%
“improving or supporting immune system health”
Social & sustainable values:
▼13% ▲30%
“zero or minimal waste products”
Cost & quality values:
▼36% ▲13%
“luxury or indulgence”
Convenience & time-saving values:
▼13% ▲32%
“convenient or saves me time”
Emerging & innovative values:
“local produce grown with new technologies like Vertical ▼16% ▲22%
farming”

29
Key takeaway:
REDEFINED VALUES
Changed relationships to
consumption have led to a
new value system among
consumers.
Sign of the Times

Stay tuned as NIQ unpacks new
manifestations of consumer values in
2023 and beyond.
30

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NIQ 2023

NIQ Global Thought Leadership

The state of Unsure about the future and bracing for

unsettled action-planning and hopeful strategizing

“In line with figures of mid-year 2023, consumers feel financially

Despite inflationary highs and global wage lows, there is a

A prevailing sentiment for survival signals cautious,

The economy High costs COVID-19

 IMPACTED by  BURDENED by  ADAPTING to

 42% worse off due to  Only 32% worse off

Negative global wage growth Inflation may be past its peak

Global: +13% +16%

Source: NielsenIQ Global Price Tracker November ‘22

Global 26% 35% 39%

Source: NielsenIQ 2023 Consumer Outlook Survey

What’s more important to

Up from 2nd rank Maintains 4th rank

Setting the Utility costs

Top consumer concerns 16%

Current impressions Future outlook Spending reality

62% * 48% * 38%

75% 49% 49%

Source: NielsenIQ 2023 Consumer Outlook Survey

Spending less Same as before Spending more

48% 47% 41% 41%

Grocery & household items

Source: NielsenIQ 2023 Consumer Outlook Survey

5.9% Global* Trend Global* sales

Global CPG Price Inflation Rate

Dollars +4 +4 +4 +5 +6 +6 +8 +9 +11 +10 +11 +11

Source: NielsenIQ 2023 Consumer Outlook Survey, Dec 2022

19% 22% Strugglers

Jan 2022 June 2022 Jan 2023

Spending intentions for next 12 months

Total Global Strugglers Rebounders Cautious Unchanged Thrivers

Leisure & Lifestyle

Source: NielsenIQ 2022 Consumer Outlook Survey, Dec 2023

Strugglers Rebounders Cautious Unchanged Thrivers

Unique Priorities - % “Strugglers” respondents

37% 33% 44%

Source: NielsenIQ 2023 Consumer Outlook Survey.

Unique Priorities - % “Thrivers” respondents

26% 17% 48%

Source: NielsenIQ 2023 Consumer Outlook Survey.

Private label share of sales over time Share Pt. Growth

Spain 43.5% +3.2 +2.2

United Kingdom 43.0% +1.0 +0.9

Germany 40.2% +0.7 +1.5

Poland 34.0% +0.5 +1.0

France 31.9% -0.3 +0.5

Italy 30.1% +1.6 +1.3

Australia 23.4% +0.3 +0.7

US 18.9% +0.3 +0.6

Canada 18.3% +0.7 +0.5

This Not That

Loyalty points over loyalty

Value stores over valued attributes

35% 20% Prioritize

Upsize over downsize

Source: NielsenIQ 2023 Consumer Outlook Survey.

vs. 2 years ago vs. year ago

Poland 71.4% +5.2 +3.0

Canada 45.2% +2.4 +1.8