Softening in rural areas jolts FMCG sector, sharp decline in demand in September quarter

This is the fourth consecutive quarter when there has been a fall in demand due to the increase in prices since the last six quarters. Demand has fallen faster in villages than in cities.

FMCG sector jolted by softening in rural areas

Industries manufacturing goods of daily consumption in the country (FMCGThe moderation in consumption continued in the September quarter as well. It has been said in a report that there has been a big decline in demand in the September quarter as compared to the June quarter. Data analysis company NielsenIQ released a report on Thursday, which said that due to inflationary pressure, companies are increasing prices, due to which consumers are choosing to buy smaller packets of products. Due to which the total demand has been affected.

Slowdown in demand for the fourth consecutive quarter

According to this report, the overall demand in the FMCG industry fell by 0.9 percent in the September quarter as compared to the June quarter. This is the fourth consecutive quarter when demand has declined due to double digit price increases over the past six quarters. Demand in rural markets declined by 2.4 per cent in the June quarter to 3.6 per cent in the September quarter. On the other hand, demand in urban markets grew by 1.2 per cent during the same period.

The report said that the Indian FMCG industry continues to grow value-based and has grown by 8.9 per cent between July and September as compared to the previous quarter. It said, the demand and price based sales in FMCG has crossed the pre-Covid i.e. March, 2020.

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customers buying small packets

The report also talks about the change in the buying habits of the people. According to this, consumers are still preferring to buy smaller packets of items and most of the new offerings have changed the size of the packets. In the September quarter, the fall in demand in traditional mediums such as kirana or neighborhood shops increased by two per cent. NielsenIQ Managing Director (India) Satish Pillai said that apart from inflationary pressures, rainfall in the country has been less or more in some places. This has also led to a softening of the indicators in the rural markets.

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