FMCG sales decline as summer shopping cools down, shows report
The biggest dragger for the FMCG July sales was the beverages category, which fell 42.2 percent in July as they went out of season with the monsoon setting in, data from retail intelligence firm Bizom showed.
After 2-3 months of record summer sales, the fast-moving consumer goods sector saw a decline in sales by 7.9 percent as the demand for summer products cooled down, data from retail intelligence firm Bizom showed.
FMCG sales however increased 5 percent on a year-on-year basis since the country was still in an unlock phase on the back of a more severe COVID wave in 2021.
The sequential decline was higher in rural markets which saw sales falling 9.7 percent, as compared to urban markets, which saw a 3.6 percent decline. This difference also comes on the back rural markets seeing a more pronounced slowdown in sales on the back of inflation.
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The biggest dragger for the FMCG July sales was beverages, which fell 42.2 percent in July as they went out of season with the monsoon setting in. In fact, Bizom says that for the month of June, beverages as a category was the driver of sales in May and June on back of a hot summer even amid strong inflationary headwinds.
Commodity sales picked up nearly 17.5 percent on the back of cooling edible oil prices which pushed up consumption of higher value packs, Bizom said. As global crude oil prices cooled off, cooking oil makers slashed MRPs across brands and variants in June by up to Rs 20 per litre.
This included the likes of Adani Wilmar, Ruchi Soya, Gemini Edibles & Fats, among others slashing prices in June.
Packaged foods also are seeing steady signs of growth on the back of improving out-of-home and entertainment activities. While sales grew 4.7 percent sequentially, they grew 28.4 percent on a YoY basis on a low base, as the economy was yet to pick up from the second wave last year.
Personal care and home care however, continue to lag. This Bizom says that amidst an inflationary scenario, consumers are still focusing on needs, rather than wants, with a larger focus on foods. As a result, personal care saw a sequential decline of 13.3 percent, while homecare decline 3.7 percent.
Commentary from FMCG companies too, have indicated early signs of a recovery in discretionary categories as mobility improves in urban areas, while still being muted in rural on the back of inflation eating into their household budgets.
“We're also starting to see an early trend emerging of Urban consumption picking up faster with increased economic activity and an increase in Out of home activities with schools, colleges and offices getting back to action," Akshay D’Souza, chief marketing officer, Bizom said.
"This has led to a spurt in Commercial real estate, Entertainment activities etc leading to a spurt in consumption of Packaged foods driven by need for convenience & quality,” he added.
In line with NielsenIQ’s prediction of a double digit growth for the FMCG sector for 2022, Bizom says that with social interactions increasing, COVID cases remaining in control and inflation looking to ease off, there will be an increase in discretionary product consumption going forward too.
(Edited by : Anand Singha)
First Published: Aug 4, 2022 3:57 PM IST
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