https://www.traditionrolex.com/28

Consumers spending less on FMCG due to inflation

Pressure of inflation is hitting hard as Indian households are cutting down spending on discretionary items such as soft drinks, packaged soups and juices, and on eating out, watching movies and personal grooming. 

Food inflation TPCI

Photo Source: Shutterstock

New Delhi, March 27: Noticing a shift in the consumer behaviour in India, a study has found that Indians consumed less daily groceries and household essentials in January 2023 incomparison to the same period last year. According to Kantar, a global consulting firm, over half of Indian households did not spend on discretionary items due to inflationary pressures.

The household consumption tracker reveals that while there was a slight volume growth of fast moving consumer goods (FMCG) sales at 0.54% in January as compared to the previous year, it was purely driven by population growth of nearly 2.7%.

K Ramakrishnan, South Asia managing director, Kantar, has said, “FMCG isn’t consumption positive yet, so there is yet a way to go to call this a complete recovery, but we are definitely on the path to it.”

The firm, in its study, states there had been an increase in the number of households not spending on most discretionary categories in the last three months leading to January, as compared to a similar period leading to November. The assumption being consumers perceived that there had been an increase in price across the majority of essential categories during the second half of 2022, which impacted discretionary spending.

K Ramakrishnan added, “However, despite the perceived hike in price, consumers are not planning to compromise on essential categories like education, medicine, staple food, groceries and daily essentials like toothpaste, shampoo and soaps. Consumers will continue to spend on these categories and are likely to manage their budget by moving to cheaper brands within household categories like washing powders and bar soaps.”

Based on the response of the surveyors, the study says over 75% of consumers are struggling to manage their budget and about 40% of them feel that the inflation situation is going to become worse in future. The company also said that 1/5th of consumers are likely to stop spending on categories like packaged juices, soups, ketchup, entertainment and eating out if prices go up further.

Leave a comment

Subscribe To Newsletter

Get to know of latest happening in TPCI & in the world of trade and commerce