India’s FMCG sales in the Diwali week of October 18-24 grew 10.6 percent over the corresponding Diwali week of 2021, data from retail intelligence platform Bizom showed.

Sales in the month of October until Diwali (Oct 1-24) grew 5.6 percent over September, while they grew 5.2 percent over the same period last year. This uptick – after sales fell 9.6 percent month-on-month in September – was led by sale of commodities, chocolates and confectionery on the back of the festive season.

Bizom says that the rise in consumption of sweets and savouries during Diwali led to a surge in commodity sales, which increased 26.4 percent in October over September.

Also read: Festive season witnesses strong sales across most sectors

And gifting led to a surge in sales of confectionery and chocolates, which grew 12.9 percent. It added that consumers have exhibited Revenge festivities which has helped drive FMCG sales up despite headwinds of inflation keeping their non-food discretionary spends relatively under control.

As a result, FMCG non-food discretionary products remained under pressure despite the festival season.

This is also evidenced in the category-wise sales data. While commodities chocolates and confectionery grew, all other category saw a decline in sales over September. Packaged foods sales were down 3.9 percent while homecare was down 4.3 percent.

Personal Care sales too, continue to be under pressure, down 17.6 percent. And beverages being off season saw a decline of 23.1 percent in sales.

Last month too, these categories saw sales decline where beverage sales were down 6.3 percent, packaged foods down 6.7 percent, homecare 8.6 percent in September over the previous month of August.

Inflationary pressures continued in rural markets, with urban showing stronger growth than urban.

Also read: Mumbai buyers loosen their purse strings for Diwali

“Also, with monsoons being erratic this year, we've seen droughts in some regions as well as excessive rainfall leading to crop damage. This hasn't helped improve rural consumer sentiment too much,” Akshay D’souza, CMO, Bizom said.

FMCG companies too, have been flagging a rural slowdown on the back of inflation. While announcing its Q2 earnings, HUL’s Sanjiv Mehta said that for FMCG, rural markets saw volumes decline 9 percent while urban markets saw a 3 percent decline while overall, the sector saw a value growth of 7 percent, while volumes declined 6 percent.

The company said it continues to be cautiously optimistic because while there are some signs of a pickup from September, volumes are still negative and commodity prices still inflated.

Dabut too said that rural demand was lagging urban for the company for the first time in five quarters. However, it added that green shoots are visible with the recovery of the festive season.

With some commodities showing signs of cooling off, companies expect rural demand to pick up in the second half of the fiscal.

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