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Resource centre on India's rural distress
 
 

Fall in FMCG sales shows a declining quality of life

-The New Indian Express

High inflation is not just a research figure fueling the economic debate. It has a real, negative impact on the daily lives of the masses.

High inflation is not just a research figure fueling the economic debate. It has a real, negative impact on the daily lives of the masses. In this respect, fast-moving consumer goods (FMCGs) that are bought daily have seen lower sales through June, compared to the previous month of May. From biscuits and shampoos to tea and toothpaste, retail tracker Bizcom reported a fall in sales of 3.1% in urban areas and 0.2% for rural areas for June. The fall in urban sales was mainly impacted by Tier-2 cities where sales shrank by 7.5%. Even in the height of summer, sales of white goods such as air-conditioners and refrigerators fell up to 15% in sequential months, showing a high level of belt-tightening by consumers.

One of the reasons for the falling sales is the price-led growth FMCG companies have been opting for to increase revenue and better bottom lines. FMCG companies are facing higher input costs, and they have been passing these on to consumers with disastrous effects. These companies, with all their market research, should have figured by now how price sensitive the Indian consumer is. High inflationary pressure in the first half of this year, coupled with a poor job market, has forced the Indian consumer to postpone purchases and cut back on consumption. 

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