FMCG sales slump in September
PremiumWith retail inflation holding firm, down-trading in rural was still prevalent during the September quarter. Urban and premium discretionary segments continued to fare better
NEW DELHI: Sales of fast moving consumer goods in value terms grew 12.3% in the September quarter but demand slipped sequentially last month, as shoppers in rural India refrained from buying branded packaged goods.
Data shared by retail intelligence platform Bizom indicates that value growth of packaged consumer goods slowed down in September compared to August declining 9.6% sequentially. Demand in rural India showed a significant decline with value growth in FMCG dropping 14.3% in September.
Categories such as packaged foods and commodities reported strong year-on-year growth in the three months through September. Packaged foods reported a 22% jump in value terms, while commodities reported a 19% year-on-year growth during the September quarter. Categories such as confectionery, however, declined 10.3%, and beverages and home care reported softer growth of 2.5% and 5.5%, respectively.
“Easing of inflation, especially on edible oils has seen commodity sales delivering strong in the quarter. With the build-up to the festival season post-monsoon, we are also seeing strong growth in sales of packaged foods. This is a great indication of consumers lapping up products offering convenience and quality with taste," said Akshay D’Souza, chief of growth and insights, Bizom.
Sales of home and personal care have been relatively muted given inflationary pressures forcing consumers to look at controlling their wallets, said D’Souza.
However, increased social interactions and upcoming festivals can help lift sales in these categories. Here, we can expect to see strong consumer discounts and product placement schemes for retailers being used to drive sales in the festive season, he said.
Meanwhile, in a quarterly update released earlier this week, Mumbai-based packaged consumer goods maker Marico Ltd., said consumers in rural India continued to down-trade as inflationary challenges continued to persist.
“In India, demand sentiment trended on similar lines as the preceding quarter during most of the quarter, with some signs of positivity in the last month. With retail inflation holding firm, down-trading in rural was still prevalent during the quarter. Urban and premium discretionary segments continued to fare better," the company said in a filing to the exchanges on 3 October.
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Marico, however, expects consumption trends to improve in the second half of the fiscal.
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