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Volumes of fast-moving consumer goods grew 4% in the 12 months ended 31 May, down from 7% in the year-ago period, showed data from research firm Kantar Worldpanel, which tracks household consumption.

The deceleration in growth points to a moderation in demand for products, such as shampoos, toilet cleaners and detergents. Consumers had stocked up on the products in the initial months of covid and re-prioritized their shopping baskets as high commodity inflation ate into household budgets, it said.

High inflation is squeezing household budgets with consumers rapidly switching to unbranded products for categories such as edible oil, butter and floor cleaners, the report added. Kantar, which tracks consumption at the household level for both branded and unbranded products, said shoppers have been increasingly indicating value-seeking behaviour.

Meanwhile, the FMCG category reported a value growth of 8% in the 12 months ended May down from 12% in the year ago. Value growth was clearly led by average price increases, it said. Average price paid per kilogram of FMCG item increased from 106 in March 2019-May 2020 to 127 in the 12-month period of 2021-22.

The decline in volume growth was reported across all three categories of products tracked by the researcher, including food and beverages, personal care and household care. The dip, however, was greater for household and personal care products.

“Our data says that while there’s no dip in volumes, there’s a massive dip in growth rates. Specifically, if you look at things like personal care, the drop is even more steep," said K. Ramakrishnan, managing director, South Asia, Worldpanel Division.

This is possibly a result of consumers going easy on buying more FMCG products compared to the last two years of the pandemic, he added. “Now, there is a lot of news about inflation being thrown around —some edible (oil) products are seeing fairly significant price inflation, and consumers started thinking that they need to play around with the basket a little. This is limiting purchases," he said in an interview.

Consumers also sought more promotions and offers, while buying more value packs during the period, Kantar said. Nearly 90% of all households surveyed said they bought FMCG products on promotions in the March-May period, up from 82% in the year ago.

Interestingly, for some categories, unbranded products gained momentum as inflation prompted consumers to move to cheaper, non-branded substitutes.

Within edible oils, for instance, unbranded oils reported a 7% increase in volumes between March-May 2021 and March-May 2022, even as branded edible oils reported a 2% dip in growth. Toilet cleaners in the unbranded category grew 13%, while branded products reported a dip of 11%.

“Whenever there’s a price increase or pressure, consumers take certain measures, one of which is going with unbranded (items). They actually balance their wallets in such a way that they are able to manage the spends," said Ramakrishnan.

Meanwhile, volume contribution of the so-called magic price points, that is products priced at 5, 10 and 20 grew 7% in the 12 months, especially within the foods category.

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