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FMCG firms, retailers rejig stock keeping in tune with market shift due to Covid-19

Meenakshi Verma Ambwani New Delhi | Updated on May 17, 2021

Firms are also realigning their assortment, range of brands to meet evolving consumer needs

The second wave of the pandemic has thrown up supply chain challenges for FMCG companies and retailers, compelling them to rejig sales strategies by prioritising certain products and stock-keeping unit (SKUs). There are also challenges of limited working hours of stores due to curbs in many States, while consumers are increasingly turning to small-format neighbourhood stores and e-commerce channels.

Mayank Shah, Senior Category Head, Parle Products said “The key focus is to ensure stocks are available at retail points and supply chains are maintained. We have therefore prioritised certain products and SKUs while utilising maximum capacity. Currently, we are only making about 50 per cent of the SKUs,” he added.

According to the latest NielsenIQ report, “To make room for more categories, retailers are prioritising on two levels. Firstly, they are dealing with a lesser number of SKUs per category. Secondly, they are stocking a lesser number of units for each SKU. This would have substantial implications for FMCG manufacturers in terms of which SKUs to push for and finding the optimum frequency for servicing stores.”

A spokesperson for PepsiCo India said, “There has been a huge uptick in demand for in-home consumption and with the recent restrictions, this has accelerated. With beverage category pivoting on multi-serve packs at discounted prices across SKUs (1.25 ltr at ₹50) and Lay’s new “at home” packs (at ₹30, ₹50 and ₹80).”

Optimising assortment

According to NielsenIQ, assortment optimisation strategies become even more crucial as consumers streamline their budgets, favour smaller format neighbourhood stores and e-commerce channels. “With the rise in e-commerce, shoppers are visiting physical stores less often, and when they do, they come prepared with lists and they spend less time browsing the shelves,” it stated in a global report in April.

Published on May 16, 2021

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