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Packaged consumer goods’ sales recovered in June and gathered pace in July as restrictions on mobility eased, and consumers stepped out of their homes to shop at malls and departmental stores.

In the first three weeks of July, sales of packaged consumer goods, led by staples such as rice, wheat flour and pulses, and confectionery, rose 1.7% from March 2021—before the deadly second wave of infections hit India—according to data from retail intelligence platform Bizom.

June sales of fast-moving consumer goods (FMCG) rebounded 39.4% from May when the second wave peaked. “This helped to completely recover from the impact of the second wave of the pandemic on FMCG sales in May," Bizom said.

Parle Products, the owner of the Parle-G biscuit brand, also saw a strong pick-up in sales in June and July.

“We saw an uptick in June, and July seems to be very good. Last July was one of our best months, and we are looking at surpassing that number. Modern trade is doing extremely well now," said Krishnarao Buddha, senior category head, marketing, Parle Products.

Urban markets are driving demand, he said. “The momentum looks like it will keep going through August as well," he added. The company reported a stronger recovery in north and south India (excluding Kerala) than in west India.

“June-July was phenomenal. There are a good amount of trade spending and offers being pushed by FMCG companies," said Aditya Goel, co-founder, Love in Store, a trade activation and execution company that works with FMCG companies and retailers in 300 cities.

Hindustan Unilever Ltd also reported a sales rebound in June and July.

“FMCG demand was severely impacted in May; however, in June, it rebounded to March 2021 levels," Ritesh Tiwari, executive director, finance and chief financial officer of HUL, told reporters on 22 July.

The rebound in June and early July was led by rural markets, according to the company.

The company’s health, hygiene and nutrition (which accounts for 85% of the company’s sales) business witnessed an 8% revenue growth in the June quarter from a year earlier.

Discretionary segments of skincare, deodorants and colour cosmetics, which account for 12% of company business, and out-of-home consumption businesses such as water, ice-cream, food solutions and vending—3% of company portfolio—also grew 39% and 91%, respectively, on a lower base, according to a report by ICICI Securities.

Last fiscal, categories such as packaged foods, flour, cooking oil, snacks and home and personal cleaning products reported growth while demand for discretionary categories and those that rely on out-of-home consumption was weak.

Companies reported a decline in these categories in the June quarter too. Demand for several such categories still remain below pre-covid levels, said companies.

Demand bounced back in June-July as the covid caseload declined, and the sentiment has improved, said Abneesh Roy at Edelweiss Securities.

“We expect that to continue in the coming quarters, unless the third wave impacts markets," he said.

ITC’s FMCG (excluding cigarettes) business reported a 10.4% growth in segment revenue, albeit on a high base.

The company reported a “progressive rebound" since June. “Both urban and rural growth rates in the FMCG industry moderated in the immediate aftermath of the sharp rise in new cases; however, there has been a progressive rebound since June with the easing of restrictions and increase in mobility," it said in its earnings release. The company’s staples portfolio, including flour and spices, and hygiene brand Savlon saw robust demand.

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