Pre-Diwali orders still on shelves, kiranas cut back on fresh orders with FMCG companies
Kiranas or neighbourhood stores, which contribute more than 85% of sales of fast-moving consumer goods companies, saw orders placed with companies decline 7.5% in November from a year earlier.
This is because retailers are left with excess inventory from pre-Diwali orders, which, however, failed to generate enough demand, especially in rural areas.
Orders also fell 3.5% compared to the previous month October, according to Bizom, which analyses data based on orders at nearly 7.5 million kirana stores.
«Demand has been challenging over the past few months and last month's decline may have been triggered by uncertainty in consumer sentiment, especially in states where elections were due. Recovery will be seen only when there are visible greenshoots in rural markets,» said Sushil Kumar Bajpai, president, RSPL Group, which makes Ghari detergent and Venus soap.
FMCG companies had indicated that consistent decline in rural markets had halted in the September quarter but deficient rains, followed by a spike in food prices affected the second part of the quarter.
