FMCG Growth Remains Weak In October-November Despite Festive Season: Report

The NielsenIQ data for November hasn’t been released yet, however, executives feel that the FMCG numbers will be gloomy despite the festive season during the period

The executives pointed out that urban sales have been declining as the surging costs have impacted the middle class severely.

Source : Unsplash

The growth in the fast-moving consumer goods (FMCG) industry continued to witness a slowdown in growth in the October-November period. This slump in growth was driven majorly by an urban slowdown.

In a conversation with The Financial Express, industry executives revealed that they expect market growth rates to revive by March-April next year, however, the projections for the near-term remain weak.

The NielsenIQ data for November hasn’t been released yet, however, executives feel that the October FMCG numbers will be gloomy despite the festive season during the period. The industry heads said that overall FMCG growth in October touched 4-5 per cent, volume growth remained around 3 per cent, and price growth stood near 1-2 per cent.

Citing Mohit Malhotra, CEO, Dabur India, the report said, “There is not much of a demand surge in the FMCG market this (December) quarter. October-November hasn’t been that good at all. Sluggish economic conditions are also showing up in FMCG, which is a barometer of overall consumption. FMCG offtakes are not looking too good, there is cash-strapping by retail and wholesale trade. All of this will weigh on the overall growth for the (December) quarter.”

Mayank Shah, VP, Parle Products explained that the October-November period remained stressful with regards to demand as sentiment was also muted. “We were expecting high single-digit overall FMCG growth for the two months, but what we are seeing is mid-single-digit growth, about 4-5% in terms of overall FMCG growth,” the executive said.

The executives pointed out that urban sales have been declining as the surging costs have impacted the middle class severely. Varun Berry, VC and MD, Britannia Industries said, “Value growth of the FMCG market in general is falling while input cost inflation is on the rise. Price hikes will help shore up margins, though inflation has been far more than we expected in wheat, palm, and cocoa.”