2-4% degrowth in consumer sector this fiscal: Report

A report unveiled by Crisil on Wednesday estimates that the consumer sector will be degrowing by 2-4% this fiscal, owing to the coronavirus lockdowns and the concomitant disruptions in demand and supply. The report cautioned that if the lockdowns continue beyond the first quarter, there could be a 30-40% degrowth in the sector. 

It also anticipates that private equity players will be keen to take over the most distressed companies, given the changing consumer priorities to health and wellness. The report notes further that discretionary segments like appliances, ready mades and quick service restaurants will see steepest revenue plunge in revenues and take the longest to recover post-lockdown. However, e-retail and essential items will recover fast as e-retail platforms meet the need for contactless shopping and doorstep delivery.

Rahul Prithiani, director at Crisil, explains, “consumer behaviour will change in the near-term as availability, convenience, affordability, hygiene and safety become priorities. The shift in brand loyalty due to unavailability will boost sales of local/SME brands which have flexible logistics.”