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Resource centre on India's rural distress
 
 

FMCG CEOs flag rural slowdown

-Livemint.com

Top packaged consumer goods companies had also flagged slowing rural demand in the December quarter, citing inflationary pressures

NEW DELHI: Top honchos of large fast moving consumer goods companies have flagged slowdown in rural demand in the March quarter, citing high inflation across products and commodities.

Analysts Manoj Menon, Aniket Sethi, and Karan Bhuwania at brokerage ICICI Securities interviewed chief executive officers of companies such as Marico Ltd., Dabur India, and Tata Consumer Products Ltd.

Most executives highlighted the adverse impact of inflation on demand.

“If we look at volume growth, overall the industry is declining. Volume growth of shampoo is flattish, while toothpaste and hair oil are declining. This situation is likely to remain same for some time due to inflation. In terms of rural, we had better performance last quarter due to some good work, while rural is declining for us as well this quarter," Mohit Malhotra, CEO, Dabur India Ltd., told the analysts in a series titled Consumer—Consumption Conversations. “Consumers’ wallet is shrinking and at the same time opening up is also leading to increasing spends in out of home categories." 

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