Home / Industry / Retail /  North gains market share in Q1 FMCG sales
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NEW DELHI : North India reported higher fast-moving consumer goods sales in the April-June quarter, helping it to gain market share by 2.5%, while the markets in the south and east reported a decline, showed data sourced from retail intelligence platform Bizom.

Overall FMCG sales by value grew 14.2% year-on-year in the quarter primarily due to price increases by consumer goods manufacturers, besides strong demand for categories such as beverages, and branded products such as edible oil, rice, spices and wheat flour. However, sales declined 0.9% between May and June. Bizom tracks region-wise market share data on FMCG sales across states.

Sales of packaged foods rose 5.8% in the June quarter from a year ago, while home-care products fell 9%. Personal care categories reported a decline of 3.2% in sales compared to a year ago while confectionery grew 2.1%, the data showed.

“April-June 2022 showed double-digit growth year-on-year despite strong inflationary headwinds mainly because of the pressure on FMCG sales during the intense covid wave last year," Akshay D’Souza, chief of growth and insights, Bizom, said.

Strong summers resulted in beverage as a category reporting disproportionate growth, he added. “Across most beverage products, this quarter saw highest seasonal sales. We are seeing strong growth across north and central India primarily driven by higher healthy beverage sales."

However, FMCG companies are likely to report muted volumes in June quarter earnings, said brokerages. “FMCG companies are expected to report price-led revenue growth, as most companies have taken 10-15% price hikes in the last one year to pass on sharp inflation in palm oil, crude derivatives and agri commodities. Volume growth is likely to remain muted in the context of lower sales in the base quarter, which was impacted by second wave of pandemic," analysts at ICICI Securities said in a sector preview late last week. Moreover, strong summer demand for ice-creams after two years of disruptions may have aided growth in the foods segment, they added.

However, D’Souza said normal monsoons are expected to improve rural income, which will help spur consumption.

Meanwhile, recent decline in prices of key commodities such as edible oils could help households. Late last week the union government asked edible oil associations to slash prices by 15 per litre amid easing global supply bottlenecks.

“With prices for edible oils also easing, we do see stronger pick up in sales of higher value packs of these products where consumers had earlier started down trading in the hope of a price correction. This cooling of prices should help brands across categories, especially where this is a key input cost. They should now be able to shift focus on consumption led growth rather than just price led growth," said D’Souza.

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