Food categories lead slowdown in retail growth

Govt anti-corruption campaign, consumer caution take their toll

Retail markets in the first quarter have seen growth slow to 6.1 percent compared with 10.4 percent a year ago, showing that consumers are getting more selective in their daily purchases and purchase volumes are staying stagnant, according to Kantar Worldpanel, a global market research institution.

China's first quarter GDP grows 7.4%

China's Q1 retail sales up 12%

The slowdown in the first quarter was primarily due to Chinese consumers' reluctance to spend as well as continued weakness in government and company spending on employee welfare, according to Jason Yu, general manager of Kantar Worldpanel China.

Despite continued strength of e-commerce channels, brick-and-mortar stores showed weaker numbers, and the slowdown was more obvious there, said Yu.

The report also said the trend is more noticeable in food rather than non-food categories, which still reported 6.8 percent growth year-on-year.

Juice and tea saw more than 20 percent value growth through reaching more consumers and raising prices, but carbonated soft drinks leveled off due to a stagnant consumer base, according to the survey.

Confectionaries showed strong growth, driven primarily by chocolate. "Compared to other categories, we continue to see strong demand of chocolate though we saw biscuits slow down," said Yu. Chocolate remained a quality choice for gifting during the holidays and continued to show double-digit growth. The category attracted more new buyers with their luxury premium offers.

Crispy snacks reversed a flat trend in 2013, recording 6.3 percent growth this year through expanding shopping occasions for consumers.

Biscuits' and cookies' strong growth during the traditional Lunar New Year was not extended. But key manufacturers like Kjeldsens, Mayora and Orion, which operate in premium biscuit segments, including gift cookies and innovative bite-size snacks, still are enjoying double-digit growth.