With weak rural demand, FMCG sales dipped 4.7% in December

The Fast-Moving Consumer Goods (FMCG) sales in December witnessed a year-on-year dip of 4.7 per cent, while the month-on-month sales grew by 1.4 per cent in December. 

According to Bizom, a retail intelligence platform that tracks consumer product sales across 7.5 million outlets, Rural India’s FMCG growth dipped by 12.5 per cent, while urban areas witnessed an increase of 12.4 per cent

“In December FMCG sales value growth grew in mid-single digits YoY. (-4.7 per cent).The key challenge in the short term was the build-up of stock at kiranas post-Diwali which impacted fresh stock placement,” said Akshay D’Souza, Chief of Growth & Insights, Bizom.

Inflationary fears in rural areas have impacted FMCG sales.

“As we get into 2023, we do see that challenges of Global Food inflation are being addressed in India by creating availability of essential food products in the local market. As Inflation continues to come down further in the months ahead it will help spur consumption. Sales in Rural have also been affected by a double-digit per cent drop in the number of kirana outlets stocking products year-on-year,” added Akshay. 

Companies state that the urban market areas are performing better, “Urban markets continued to do better than rural markets in terms of demand even as the latter showed some signs of revival in the second half of the month. For instance, there was a shortage of potato chips due to the unavailability of potatoes in the market. Yet, traditional namkeen products did perform better this December month,” said Manish Aggarwal, Director, Bikano, Bikanervala Foods Pvt Ltd.

“Our major sales are in Tier 2 and 3 cities of Uttar Pradesh, Rajasthan, Haryana, Madhya Pradesh and Bihar, and in December we saw a growth of 35 per cent as compared to last year,” said Ashish Khandelwal, Managing Director, BL Agro.

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