The nation’s FMCG business continued to witness consumption slowdown within the September quarter, with rural markets registering a better decline in volumes in comparison with the three months ended June, says a report.
Also, customers continued to want buying smaller packets amid firms mountaineering costs in response to broader inflationary pressures, in keeping with the report launched by knowledge analytics agency NielsenIQ on Thursday.
The FMCG business witnessed an total quantity decline of 0.9 per cent within the September quarter compared to the previous three months.
This was the fourth consecutive quarter with adverse quantity progress for the business and is “attributed to the double-digit price growth for the past six consecutive quarters,” the quarterly FMCG business report mentioned.
Rural markets recorded a quantity decline of three.6 per cent within the September quarter compared to a decline of two.4 per cent within the June quarter.
“The consumption decline in the rural markets continues to be led by both double-digit price increases and lower unit growth,” the report mentioned.
During the identical interval, city markets recorded an 1.2 per cent improve in volumes.
This progress was led by the meals phase with a 3.2 per cent quantity progress whereas the non-food phase had a decline of three.6 per cent within the September quarter.
However, the report mentioned the Indian FMCG business continued to have a price-led progress in topline, with a an 8.9 per cent progress within the July-September interval in comparison with the earlier quarter.
“Volume and value sales of FMCG are above pre-Covid levels” of March quarter of 2020 because the “markets have opened up completely post-pandemic,” it added.
Consumers continued to want smaller pack sizes. For the business “average pack size growth is negative in July-September 2022, as consumers keep on buying smaller packs,” the report mentioned.
“Most of these new product offering is in terms of changes in pack size. This could be the result of manufacturers working with smaller grammages as raw material prices are still high,” the report mentioned.
During the September quarter, quantity degrowth at conventional commerce channels resembling kirana and neighbourhood retailers deepened by 2 per cent in comparison with the June quarter.
Modern commerce channels resembling hypermarkets, supermarkets and malls “remain resilient with double-digit value (22.2 per cent) as well as volume (11 per cent),” the report mentioned.
As per the report, small producers and high 400 FMCG gamers are driving the consumption with optimistic quantity progress of 0.5 per cent.
“They are also gaining both value and volume share in last 2-3 quarters when looked at sequentially,” it added.
NielsenIQ Managing Director India Satish Pillai mentioned that whereas the strain of inflation continues, there have been variations in rainfall throughout rural areas within the nation which have additionally led to a softening of indicators for rural markets.
This sentiment additionally exhibits up within the cautious behaviour of the retail commerce, he added.
