As inflation pinches the consumer’s wallet, there has been a rise in the purchase of unbranded products in the last three months, a report by Kantar Worldpanel shows.
Unbranded products across categories such as edible oil, butter/cheese, and homecare products such as toilet and floor cleaners have seen a volume growth, while branded products saw a decline. This is growth from March to May of 2022 over the same period in 2021.
In the case of edible oils, which saw the steepest inflation due to global geopolitical issues, the volume of unbranded products grew 7 percent, while branded declined by 2 percent.
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In butter/cheese category, unbranded products saw volume growth of 10 percent, while branded declined 16 percent. Among home care products, toilet/bathroom cleaners saw volumes of unbranded products rise by 13 percent and branded slipped by 11 percent.
The report also shows that consumers prioritised spending on food and beverages (F&B), while rationalised spending on personal and household care. This is indicative in the data where the slowdown in spending on food and beverages was lower than that on personal and household care products. For the 12-month period ending May 2022 (MAT May 2022), F&B spending growth slowed down to 4 percent as against 8 percent a year ago.
This was led by a sharp slowdown in growth in the personal care category to a one percent growth in MAT in May 2022 as against a 11 percent growth in personal care. Within personal care, the decrease was led by spending on hair oils, toilet soaps and skin creams.
Inflation has also resulted in a significant increase in households buying FMCG products on promotions, the report noted. Eighty-nine percent of households are buying their daily essentials on promotions, as compared to 74 percent in the 12-month period ending May 2020, which is before the COVID-19 pandemic.
K Ramakrishnan, Managing Director at Kantar pointed out there is some bipolarity in terms of the impact on consumers. There is one segment of consumers that was not impacted by the pandemic and inflation, which is driving the premium segment in India, while there is also a large consumer segment that was impacted by the pandemic and so is focusing on saving more and spending less.
However, overall, he said that there is visible stress among consumers due to rising inflation, also indicated in the fact that while the premium segment is growing across sectors in the current year, there has been a slight slowdown in growth compared to last year.
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