Heading towards a slowdown amid inflationary pressures, the FMCG industry’s volume growth during August-October this year has dropped to 4.3 per cent from 6.4 per cent in the year-ago period, research and insight firm Kantar said in a report.
Moreover, the FMCG volume growth was lower sequentially also as in the May-July period, this was 4.5 per cent, according to Kantar’s latest FMCG Pulse report.
“We are in that last quarter, and the FMCG growth as of the quarter ending October is 4.3 per cent. This number is a far cry from the 6.4 per cent growth seen in Q/E Oct ‘23, but is also a tad lower than 4.5 per cent we saw in the last quarter, i.E. Q/E Jul ‘24,” it said. Volume growth in the urban market was at 4.5 per cent in the August-October period, down from 6.9 per cent in the same period of 2023.
However, the report added: “It is also true that a 4.5 per cent growth following a near 7 per cent growth in the previous term is extremely rare. In fact, over the last five years, this has only happened in the quarters of 2024.”
Therefore, technically urban is in a slowdown, though “it is far from a slump”.
About the inflation, the report said that per-household average quarterly spending crossed Rs 6,000 for the first time in the August-October period of 2022, and two years since then, spending has seen a 13 per cent jump and is at Rs 6,761 during this quarter. In May-July 2024, shoppers were paying Rs 133 per KG of FMCG on average. Just one quarter since then, shoppers are paying Rs 137 per KG, a jump of Rs 4 per KG in the latest August-October period. “In recent years, this kind of growth in a single consecutive quarter was only seen during the initial months of the 2022 inflation period,” it said.
With no signs of food inflation relenting in the immediate future, where value growth rapidly draws away from volume growth for some more time, it’s hard to see urban (market) growing more rapidly than the current levels. “We are expecting similar levels of growth to continue into the first half of the next year,” it said.
