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.
Additionally, 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 general quantity decline of 0.9 per cent within the September quarter compared to the previous three months.
This was the fourth consecutive quarter with damaging quantity development for the business and is “attributed to the double-digit worth development for the previous 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 within the rural markets continues to be led by each double-digit worth will increase and decrease unit development,” the report mentioned.
Throughout the identical interval, city markets recorded an 1.2 per cent enhance in volumes.
This development was led by the meals phase with a 3.2 per cent quantity development whereas the non-food phase had a decline of three.6 per cent within the September quarter.
Nonetheless, the report mentioned the Indian FMCG business continued to have a price-led development in topline, with a an 8.9 per cent development within the July-September interval in comparison with the earlier quarter.
“Quantity and worth gross sales of FMCG are above pre-Covid ranges” of March quarter of 2020 because the “markets have opened up fully post-pandemic,” it added.
Customers continued to want smaller pack sizes. For the business “common pack measurement development is damaging in July-September 2022, as customers carry on shopping for smaller packs,” the report mentioned.
“Most of those new product providing is by way of modifications in pack measurement. This could possibly be the results of producers working with smaller grammages as uncooked materials costs are nonetheless excessive,” the report mentioned.
In the course of the September quarter, quantity degrowth at conventional commerce channels comparable to kirana and neighbourhood retailers deepened by 2 per cent in comparison with the June quarter.
Trendy commerce channels comparable to hypermarkets, supermarkets and malls “stay resilient with double-digit worth (22.2 per cent) in addition to quantity (11 per cent),” the report mentioned.
As per the report, small producers and high 400 FMCG gamers are driving the consumption with optimistic quantity development of 0.5 per cent.
“They’re additionally gaining each worth and quantity share in final 2-3 quarters when checked out 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.