Rising prices hit grocery consumption, staples and F&B worst affected

Unit consumption of each day groceries and necessities fell marginally through the quarter ended March, over the yr in the past interval, as constant value hikes pressured individuals to chop again on family spending, and the omicron wave impacted out of house consumption in January.

The variety of items purchased, or volumes, fell 0.8% within the quarter, based on international client analysis agency Kantar Worldpanel (previously IMRB). A 1.7% growth in rural areas was offset by a stoop within the cities the place demand fell by 3.4%.For many firms city areas account for almost two-thirds of gross sales.

That is the third consecutive quarter of declining volumes within the general market, which firms attribute to discount in pack sizes, as shoppers go for lower-priced merchandise and tighten their spending amidst a squeezing of family budgets.

“For many Indians, incomes are restricted. Add to that value will increase, not simply in packaged FMCG, however in a gamut of issues together with gas, edible oils, and grains, ” Sanjiv Mehta, managing director of Hindustan Unilever, instructed ET on Friday.


“Because of this, funds within the households meant for spending on packaged FMCG typically get decreased and shoppers titrate volumes by decreasing the quantum of consumption or in lots of instances go for low-unit value packs,” he stated.

Inside the general consumption basket, staples have been the worst affected adopted by meals and drinks, whose out of house consumption was depressed within the first few weeks of the quarter as a result of Omicron wave. Each staples and F&B fell 7.6% and a couple of.2%, respectively. Rural gross sales development additionally tapered off however nonetheless rising forward of city, say consultants.

“Through the pandemic, shoppers have been stocking up, a behaviour we noticed nearly for a whole yr. Staples had benefitted on account of this. Nonetheless, with inflation hitting, stock-up disappeared and purchases slowed within the class,” stated Okay Ramakrishnan, managing director, South Asia, Kantar Worldpanel Division. He identified that atta quantity declined 27%, dragging the general staples down.

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