Limited store hours may impact availability of FMCG goods3 min read . Updated: 03 May 2021, 08:30 PM IST
- Restrictions could eventually affect product availability in the market creating shortages despite smooth production
Makers of fast-moving consumer goods and their distributors said that restrictions in some states on timings of stores selling essential goods has narrowed their window for delivery in these markets eventually impacting availability of some products.
Maharashtra that has extended a lockdown till 15 May, allows its essential goods shops to open only between 7 am and 11 am. Karnataka has permitted stores selling food, groceries, fruits, vegetables, etc to function from 6 am to 10 am while similar shops in Odisha will be open from 6 am to 12 pm on weekdays. Rajasthan has restricted essentials stores to open just for five hours, with exceptions on weekends.
“The weakness we are seeing is not in off take or consumption, it is more the supply chain disruption because as you know that each state is going for a sequential lockdown. And there are a lot of cases the grocery opening hours are limited and it’s led to some supply chain issues," said Saugata Gupta, managing director and chief executive officer, Marico Ltd in a post earnings call last week.
“Also, some of the distributors, some of the people who are not well, so these are just some supply chain disruptions. We don't see any significant consumption impact," he added.
Indore-based snack maker Prataap Snacks said the latest restrictions have shrunk the time companies have to reach markets. “There are two issues we are facing—first is the limited time in market to sell in limited number of outlets. Second is reaching stocks to distributors inside the cities," said Subhashis Basu, the company’s chief operating officer.
Such restrictions could eventually affect product availability in the market creating shortages despite smooth production.
“Things have to be managed within a few hours in the morning from, let's say, seven to eleven, with different places have different timings. So there's some impact," conceded Mayank Shah,senior category head, Parle Products. Though he said, the move is for larger good, it does limit both product assortments and distribution coverage. As a results Parle is prioritizing and sending only its hot-selling SKU (stock keeping units) in the market as new launches take a back seat.
Dhairyashil Patil, national president, All India Consumer Products Distributors Federation, said that although consumers are not pantry-loading or panic buying, with shorter store timings, deliveries are not happening fully. “At some places they may be at 80% or even 60%," he said.
For Amrinder Singh, director, BONN Group of Industries, that makes bread and cookies, restrictions may be worrisome because of the nature of his products. “Our business completely depends on how quickly distributors get the goods to the retailer. The longer they hold goods, the higher the chances of spoilage, damage, or obsolescence," he said.
Abneesh Roy, executive vice president Edelweiss Securities expects a limited impact on product availability as companies are trying hard to reach products to the stores. Yet, smaller companies may be impacted. “Companies with a presence in chemist shops – that are open for longer hours -- will benefit immensely," he said.
To overcome curfew on store timings, Bisleri, for instance, said it has expanded its reach and presence across channels such as chemists and milk and vegetable vendors apart from deepening tie-ups with online platforms.
“In most cities these channels are permitted to sustain operations through the day. In many places our delivery partners helped us improve our service levels significantly. We have also tied up with online delivery partners to scale up servicing across top 40 cities," Angelo George, CEO, Bisleri International, Pvt. Ltd said.
Marico’s Gupta too said the company is scaling up some of the initiatives it put in place last year such as tele-calling. He said the company expects to get back to its run-rate sometime in May-end or June.
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