FMCG Sector Continues To See Slowdown In Consumption In Q2: Report

New Delhi:

The nation’s Quick-moving client items (FMCG) business continued to witness a 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, shoppers continued to favor buying smaller packets amid firms climbing 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 unfavorable 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 section with a 3.2 per cent quantity development whereas the non-food section 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 utterly post-pandemic,” it added.

Shoppers continued to favor smaller pack sizes. For the business “common pack dimension development is unfavorable in July-September 2022, as shoppers carry on shopping for smaller packs,” the report mentioned.

“Most of those new product providing is by way of modifications in pack dimension. This may very well be the results of producers working with smaller grammage as uncooked materials costs are nonetheless excessive,” the report mentioned.

In the course of the September quarter, quantity degrowth at conventional commerce channels corresponding to kirana and neighbourhood retailers deepened by 2 per cent in comparison with the June quarter.

Fashionable commerce channels corresponding 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 constructive 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. 

(Apart from the headline, this story has not been edited by NDTV employees and is printed from a syndicated feed.)