FMCG Companies face massive demand slowdown due to price hikes.
#fmcg companies are facing a slowdown of massive proportions as price hikes start to bite.
Consumer demand is falling like crazy in May compared to April.
#urban sales is down 16%.
#rural sales is down 16.6%.
Most affected are categories of #commodity products (down 31%) and confectionery (down by 10%).
Commodity products include #atta and #edibleoil, items of basic consumption.
And the dip is bigger in urban areas than rural. Urban areas of 5mn+ population are down by 18%.
Whats happening?
Consumers are downtrading like crazy.
High prices are beginning to bite now.
And with Europe phasing out oil purchases from Russia in the next few months, oil has already climbed higher.
A peculiar situation in India is the need to have #packaging sizes that sell at Re 1, 5 and 10.
This forces fmcg companies to reduce grammage to maintain pricing at these levels.
So the #consumer thinks he is paying the same, but in reality he is getting much less for the same #price.
Investors in fmcg companies - expect some more pain ahead.
Consumers - watch your consumption basket carefully as inflation is here to stay.
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