Demand for groceries and other FMCG products was lowest  at 3.5% in Jan-Mar25 period

Global research farm Kanter reportedly said that demand for daily required items like groceries households and personal products fell to a two-year low during the March quarter of the last FY 25.
Kanter reportedly said that the growth of sale of fast moving consumers goods or FMCGs in the last January to March quarter was slowest at 3.5% since March quarter 2023. In the same period of the last
year the growth of sales of FMCGs in the Indian market was 5.5%.

The research farm clarified the slowdown of sales in rural and urban sector separately. In the rural market the sale growth was spectacularly weak. Sales volumes in rural market grew only by 2.7%. This
was 6.3% in the same period of the previous year. But the demand in the cities was more or less same at 4.4% compared to that of a year ago.

But the demand for comparatively low brands items was higher in the urban market than that of established bigger brands. Noticeably, demand for established brands was stronger in the rural market.
The urban market is of bigger importance for the listed companies for FMCGs. For most listed companies urban markets account for anywhere between 50% and 70% of the overall sales.

Why did the growth of sales fell sharply?

The research farm mentioned that over the past year consumer felt the pressures of high inflation, low wage growth and higher housing rentals in the urban sector. This is why they had to cut short of their
daily required goods of the families.

When can one expect the trend to reverse?

But in the coming months there are some favourable factors that can boost demand for FMCGs. It is expected that food inflation will remain lower, the monsoon will remain normal and pay commission in FY
26 hike of salaries and lower income tax will help to increase the demand for FMCGs in the coming quarters.