4 min read.Updated: 16 May 2022, 10:21 PM ISTAndy Mukherjee
Pack resizing in 2021 by marketers like HUL should’ve alerted RBI
If it wanted to get ahead of the inflation challenge, India’s central bank should have paid more attention to Surf Excel. The price of this detergent went up by 20% in January. While that’s hardly news when most daily-use items are getting dearer, the interesting part was the retail price before the change: ₹10 for a bar. Such tiny bars of detergent are aimed at consumers who are often unable to spend a rupee more without having to cut back on something else. To prevent these customers from downgrading to cheaper products, Hindustan Unilever (HUL) relies on “magic price points"—such as ₹5 or ₹10—that help buyers stay within tight budgets. “Almost 30% of our business comes from packs that operate at magic price points," Ritesh Tiwari, chief financial officer of HUL, said recently. For these packs, weight cuts are common. “As a result, even the same number of units sold leads to volume decline."