South Africa’s fast-moving consumer goods (FMCG) market is proving resilient so far in 2026, although retailers and brands in the tech and durables (T&D) sector are experiencing a number of challenges.
This is according to NielsenIQ (NIQ) South Africa, which has released its State of the Retail Nation analysis for the first half of 2026
During the period under review, South African consumers spent R347,7-billion on FMCG products through traditional and modern trade channels. Sales value grew 5,5% year over year and unit sales increased 7,7% compared to the first half of 2025, with strong snacking, beverage and tobacco performance lifting the market.
The T&D market experienced a difficult first half as consumer caution and longer replacement cycles dampened sales. Unit sales were down 2,6% year over year and the value of the T&D market declined 5,8%. Telecoms showed modest growth in sales value, up 1,1%, the only major T&D category to record an increase in value for the period.
“FMCG spending held up relatively well in the first half of the year despite continued pressure on household budgets,” says Zak Haeri, MD of NIQ South Africa. “However, the T&D sector experienced a more difficult environment as consumers trimmed discretionary spending and delayed product replacement cycles.”
Snacks and beverages grow, baby and pet care decline
Food, the largest FMCG category, showed a 5,1% increase in unit sales and a 4,7% increase in sales value, reaching sales of R125,2-billion for the first half of the year. Beverages was one of the top-performing categories, with volumes up 8,8% compared to the same period in 2025 and sales value increasing 8,3% to R49,6-billion.
Snacking was another bright spot, with sales value expanding by 7,4% to R25,8-billion and unit sales jumping 15,6%. Baby food and care continued to decline, with sales value falling 2% to R6,9-billion and unit sales declining 2,7%. The pet food and care category also shrank, with sales value down 1,1% to R2,3-billion and unit sales down 3,5%.
Traditional trade continued to be a key driver of FMCG growth. Sales value through traditional trade channels generated R85,4-billion in sales with 13,7% growth in the first half of the year.
Traditional trade refers to independent (non-chain, non-franchised) stores that stock consumer packaged goods with a fixed, physical location such as taverns, spaza shops and independently owned superettes.
Modern trade remained the largest channel, with sales of R257,1-billion, but recorded slower sales value growth of 3,7%. Modern trade channels include online retailers, franchised stores and outlets which form part of a retail chain.
“While FMCG shoppers showed resilience in the first half of the year, we are seeing a shift in consumer behaviour that manufacturers and retailers should not ignore,” says Haeri. “A growing proportion of FMCG sales are now taking place on promotion as consumers continue to tighten their belts.
“Our analysis of spending across major FMCG categories found year-on-year increases in regular and promotional price elasticity. In other words, consumers are more responsive to price increases and promotional offers than they were a year ago. Retailers and brands need to carefully balance driving volume today with preserving long-term pricing power, while ensuring that their pack sizes, pricing and promotions are appropriate for each channel.”
T&D sector weakens further
Conditions in the T&D sector remained difficult in the first half of 2026. Telecoms was the only major category to show sales value growth, while major domestic appliances and panel televisions were among the few categories to record increases in unit sales.
“Slower discretionary spending took its toll on the T&D sector in the first half,” says Haeri. “Growing competition from emerging Chinese brands has also introduced more pricing pressure in key segments of the appliance and consumer technology markets. Consumers will invest in new products when purchases solve immediate practical needs, improve efficiency or offer strong value for money.”
Telecoms, the largest category in the South African T&D market, recorded a 1,1% increase in sales value, but unit sales dropped 7,9%. Average selling prices rose 9,8%.
Smartphone demand proved more resilient than most discretionary product groups, although affordability pressures weighed on volumes.
Growth in both prepaid and postpaid smartphone value indicates that some consumers are trading up.
The information technology category recorded a 10,7% decline in sales value and a 2,3% drop in unit sales, while average selling prices fell 8,6%.
Weak demand affected the entire category as consumers delayed upgrades and kept devices for longer. Declining average selling prices suggest increased competition and promotional activity.
“In the IT and smartphone segments, consumers appear to be postponing upgrades rather than rejecting technology altogether. Purchases still happen when the benefit is visible and practical,” says Haeri. “The strongest purchase trigger is capable specifications, practical features and affordability in one package.”
Declines for appliances
The major domestic appliances market was down 0,5% in sales value. Unit sales increased 2,1% as consumers continued to replace essential household appliances, but average selling prices declined 2,5%, limiting overall value performance. Promotional activity remained relatively restrained, while the online channel continued to outperform traditional store-based retail.
Small domestic appliances recorded a sharp decline of 9,5% in value terms and 5,7% in units. Average selling prices fell 4%. Consumers became increasingly selective in their purchasing behaviour, with demand shifting towards replacement and necessity purchases rather than lifestyle, convenience-led or luxury products.
The panel television market fell 6,6% in sales value despite unit growth of 4,5%. Average selling prices declined 10,7% as consumers increasingly prioritised affordability and value-for-money. The office machines market declined 9,7% in value terms and 6,2% in units, continuing its long-term contraction.
Caution and cost-consciousness
Haeri says: “The theme of the first half of the year was a consumer who continued to become more cautious and cost-conscious. In the FMCG space, manufacturers and retailers face the challenge of using promotions strategically without conditioning consumers to wait for discounts before buying.
“In T&D, the pressure is even more pronounced. Consumers are extending product lifecycles and committing only to purchases that deliver exceptional value. For brands and retailers, success depends on demonstrating innovative features, competitive pricing and smart promotions to give consumers compelling reasons to upgrade.”