Sales of India’s fast-moving consumer goods for the July-September quarter dipped by 2.3 percent year-on-year in value amid rising food inflation and an erratic monsoon, data from retail intelligence firm Bizom showed. In the month of August, sales were down 11.2 percent over August last year, and down 8.4 percent over July 2023, as per the the data, which comes at a time when FMCG companies are set to announce their Q2 results in October.

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From a category standpoint, sales of categories like commodities and beverages, which are directly impacted by these factors saw a slowdown. Sales of commodities like oil, pulses, etc, for instance, were down 14.9 percent in Q2, while beverage sales were down 12.1 percent in Q2 impacted by cooling temperatures on account of monsoons.

Prices of commodities have been shooting up in the past few quarters, leading to consumers cutting down their purchases or down trading.

However, given that, this data shows sales by value, Bizom says a sharp reduction in prices of some commodities like Edible oils also was a factor, leading to kirana stores clocking lower sales of branded commodities.

A similar sentiment has been indicated by FMCG companies in their quarterly updates.

Godrej Consumer Products said, in its update, that its India business saw weak macros and adverse weather conditions during the quarter.

“Despite the tough operating environment our organic business delivered steady performance with mid-single digit volume growth,” GCPL said.

Marico, on the other hand, said that instances of rising food prices and below-normal rainfall distribution in some regions seemed to impede the anticipated recovery in rural demand. “Consumption trends, particularly in rural, are expected to improve in H2 owing to retail inflation levels staying within RBI’s target range, hike in MSPs, healthy sowing season, easing liquidity pressures and government spending,” the company added.

With the festive season kicking off from August with Rakhi, Independence Day, Ganesh Chaturthi, etc, sales of some discretionary categories have seen a pick up. For instance, Bizom’s data shows that sales of confectionary was up 9 percent in the quarter. Sales of packaged foods also were up 7.3 percent in the quarter, while home care sales grew 16.8 percent as consumers look at tidying up their homes.

Bizom’s data for the month of September is also showing similar trends, with sales rising 4.9 percent YoY in the month, after August saw sales declining 11.2 percent YoY and 8.4 percent over the month of July. For categories too, Confectionary sales were up 34.5 percent YoY in September, while packaged foods sales increased 22.1 percent, home care sales by 14.4 percent and personal care too, saw sales rising nearly 23 percent, while it was flat (0.9%) for the whole quarter.

“As we build up to Diwali, we do expect FMCG companies to increase kirana stocking further. This is mainly to grow market share as they look to garner a higher share of the spike in demand during Diwali,” Akshay D’Souza, Chief of Growth & Insights, Bizom said.

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