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  1. Consumer spend loses velocity, FMCG absolute value drops 1-1.5%: Nielsen

Consumer spend loses velocity, FMCG absolute value drops 1-1.5%: Nielsen

Fast Moving Consumer Goods (FMCG) category, which is valued at R2,56,000 crore, has seen a 1-1.5% drop in terms of absolute value, according to a latest report by Nielsen India.

By: | New Delhi | Published: December 24, 2016 6:24 AM

Fast Moving Consumer Goods (FMCG) category, which is valued at R2,56,000 crore, has seen a 1-1.5% drop in terms of absolute value, according to a latest report by Nielsen India. Despite consumers spending during the festive season including Diwali, there is an indication of lost velocity in FMCG.

According to the report, retailer purchases are declining faster than consumer sales, leading to a belief that some amount of softness may have crept into December as well.

Impulse foods and personal care products are the most affected categories in terms of consumer offtake loss. “Consumers stocked up on packaged grocery leading to a growth in the segment,” said the report.

Also personal care items like toilet soaps, toothpaste and shampoo witnessed the steepest decline in retailer purchases. The decline in offtakes is driven by urban market at -3.1% for the period November versus October 2016 while rural has managed to stay flat at 0.4%. While largely the rural market has recovered on the back of good monsoon, as per the report, rural market has mostly operated differently with higher incidence of low unit packs, smaller currency transactions and barter system.

Meanwhile, chemists stood out in November by growing positively, especially in rural areas. This can be partially attributed to the fact that chemists were allowed to accept old currency until November 24th, 2016. On the other hand, Paan Plus stores, which typically make small but frequent purchases, appear to be hit the hardest.

In addition to the consumer sales dropping across November, grocers who were audited towards the end of the November cycle, showed a higher purchase decline.

Further, the channel of choice for grocery purchases has changed. The report states that every second consumer has chosen modern retail and online for household purchases like food essentials including atta, rice and oil.

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