Inflation continues to hit FMCG business, city progress anticipated to gradual in H1/2025: Kantar report, ETCFO
New Delhi, Heading in the direction of a slowdown amid inflationary pressures, the FMCG business’s quantity progress throughout August-October this yr has dropped to 4.3 per cent from 6.4 per cent within the year-ago interval, analysis and perception agency Kantar stated in a report. Furthermore, the FMCG quantity progress was decrease sequentially additionally as within the Might-July interval, this was 4.5 per cent, in accordance with Kantar’s newest FMCG Pulse report.
“We’re in that final quarter, and the FMCG progress as of the quarter ending October is 4.3 per cent. This quantity is a far cry from the 6.4 per cent progress seen in Q/E Oct ’23, however can be a tad decrease than 4.5 per cent we noticed within the final quarter, i.e. Q/E Jul ’24,” it stated.
Quantity progress within the city market was at 4.5 per cent within the August-October interval, down from 6.9 per cent in the identical interval of 2023.
Nevertheless, the report added: “Additionally it is true {that a} 4.5 per cent progress following a close to 7 per cent progress within the earlier time period is extraordinarily uncommon. In truth, during the last 5 years, this has solely occurred within the quarters of 2024.”
Subsequently, technically city is in a slowdown, although “it’s removed from a droop”.
In regards to the inflation, the report stated that per-household common quarterly spending crossed Rs 6,000 for the primary time within the August-October interval of 2022, and two years since then, spending has seen a 13 per cent leap and is at Rs 6,761 throughout this quarter.
In Might-July 2024, customers had been paying Rs 133 per KG of FMCG on common. Only one quarter since then, customers are paying Rs 137 per KG, a leap of Rs 4 per KG within the newest August-October interval.
“In recent times, this type of progress in a single consecutive quarter was solely seen through the preliminary months of the 2022 inflation interval,” it stated.
With no indicators of meals inflation relenting within the speedy future, the place worth progress quickly attracts away from quantity progress for some extra time, it is laborious to see city (market) rising extra quickly than the present ranges.
“We predict related ranges of progress to proceed into the primary half of the following yr,” it stated.
In regards to the rural market, Kantar stated it additionally appeared “underperforming” with simply 4 per cent progress, which is even slower than the 4.5 per cent progress of the city market within the August-October interval.
Nevertheless, it additionally added this was led by the mega class, wheat flour (atta).
“Non-atta rural FMCG progress is secure linearly and is rising seasonally,” it stated.
Private care classes have seen a powerful leap from 2.8 per cent to five.4 per cent in August-October, 2024, in comparison with a yr in the past. This can be a good indicator of a optimistic market, and the extent of progress right here provides us extra confidence on the agricultural market, it added.
“Rural additionally has seen a close to 11 per cent CFPI (meals worth inflation), and this has resulted in an identical worth progress differential right here,” it stated.
There are some considerations over rainfall for the rabi season, however a serious stress just isn’t anticipated, it stated.
