FMCG companies to see muted demand in June quarter, recovery likely in H2
Demand for daily groceries, essentials and household products will likely be muted in the current quarter, global research firm Kantar said, but it indicated a rural-led recovery in the second half of FY25 even though urban consumption could remain a relative straggler.
Overall volumes, which indicate the number of products consumers bought, expanded 5.2% in the March quarter, unchanged from the three months to December. Sales volumes in rural markets climbed 5.8%, and in cities by 4.7%, from a year earlier, data from Kantar showed. Kantar monitors branded and unorganised products, including unpackaged voluminous commodities. Nielsen, on the other hand, tracks primarily branded retail sales.
«There was significant inflation that led to shrinkflation, or consumers downgrading. But the worst is behind us and there is visibility of better growth,» said Saugata Gupta, managing director, Marico. «There will obviously be volume improvement although there will be some pricing growth as well. We definitely see a double-digit revenue growth.»
Shrinkflation refers to reduction in pack sizes without lowering prices. India's price-sensitive consumer industry has faced a demand crunch after companies raised sticker prices by almost a quarter in the past two years to offset the impact of input costs, which first climbed in the immediate aftermath of global supply chain disruptions spawned by mobility and business curbs deployed to contain the spread of the coronavirus.
Subsequently, record low policy rates in the world's
