Soft drinks, ghee, tea got costlier amid lockdown; customers paid more price for essentials: Nielsen

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Published: May 22, 2020 5:00:31 PM

While FMCG sales slumped during April when the country was under a lockdown due to coronavirus, prices of certain fast-moving consumer goods such as cooking oil, soft drinks, ghee etc went up drastically.

FMCG sector growth slowed down to 6.3% during the first quarter of 2020 from 7% in Q4 2019Soft drinks prices went up by 24% in the phase 1 and phase 2 of lockdown as compared to the average prices at which they were being sold in the last year.

While FMCG sales slumped during April when the country was under a lockdown due to coronavirus, prices of certain fast-moving consumer goods such as cooking oil, soft drinks, ghee etc went up drastically. During this phase, the amount of discounting went down. Promotions were cut down. While MRP has remained the same, effective price got higher due to which customers ended up paying higher prices, Prasun Basu, President, South Asia, Nielsen, told Financial Express Online. Also, there were availability constraints of popular brands and some local brands too which led to people buying whichever brands were available even if they were priced higher. Customers upgraded to higher brands due to lesser availability of certain SKUs, he added.

Soft drinks prices went up by 24% in the phase 1 and phase 2 of lockdown as compared to the average prices at which they were being sold in the last year, according to the findings of market research firm Nielsen. Similarly, packaged ghee retailed higher by 18%; packaged tea at 12%; packaged atta at 12% and refined oils at 14% higher during phase 2. 

However, the FMCG sector in general has witnessed a slip of over 30% with sales of traditional trade and modern trade combined in April. While traditional trade alone slumped by 38%, the modern sales stood at 5% higher than last year’s sales number. The channels of traditional trade such as grocers, chemists etc were closed for 12 days on an average during lockdown. 

Going ahead, “customers will pivot towards what is familiar (safer). Existing memories of relevant brands/products that are visible will get reinforced,” Nielsen said. Further, as customers are increasingly choosing e-commerce for their purchases, FMCG companies are also looking to realign their strategies and are expected to go aggressive on e-commerce in both short and long term.

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