Sales of fast moving consumer goods (FMCG) has been adversely impacted post demonetisation in traditional trade that is mom and pop stores in urban and rural India, according to a report by Nielsen India. FMCG generates 92% sale from traditional trade.
According to the report, almost 62% dealers claim that there has been a dip in the business.
Usage of credit/debit cards and liquidity remains a challenge in traditional trade and is a key reason behind the drop in sale, compared to modern retail outlets. Only a small proportion of about 10% stores continued accepting old high value notes for the first few days.
The report states that mom and pop stores lag woefully behind on card machines, digital wallets or coupons. In fact, the figure stands at a dismal 1%.
Impulse categories like biscuits and salty snacks are taking the biggest hit, along with some personal care categories like toilet soaps, shampoos and detergents. Also post demonetisation, a little over 54%, dealers are facing issues with stock replenishment both in urban and rural areas, with wholesalers and distributors not visiting them as per the planned schedule.
Business of Cash and Carry outlets also witnessed a slowdown, revealed the study. The slowdown was primarily a drop in the sale of non-food categories. As per the report, among non-food categories, personal care women was least affected while personal care-general saw a bigger impact.
Impulse food witnessed the steepest decline in demand, while cooking oil and packaged grocery saw an exorbitant demand from retailers on the back of the belief that consumers would prefer to stock up on essentials in wake of the cash crunch.