Indicating a slowdown in demand due to inflationary pressures, FMCG industry’s volume growth stood at 4.3 per cent in the August-October period down from 6.4 per cent in the corresponding quarter in the previous year, as per estimates by research and insights firm Kantar. The growth was also slightly lower sequentially compared to May-July period (4.5 per cent), it noted in its FMCG Pulse Report.

Urban regions

Volume growth for the FMCG industry in urban regions stood at 4.5 per cent in August-October period down from 6.9 per cent in August-October in 2023. However, the value growth was higher at 6.4 per cent during this period, with the report adding that, “while technically urban is in slowdown, it is far from a slump.”

Pointing to inflationary pressures, the Kantar report noted that in May-July period, shoppers were on an average spending ₹133 per Kg on FMCG goods. Within one quarter this has jumped by ₹4 to ₹137 per Kg in August-October period. “In the recent years, this kind of growth in a single consecutive quarter was only seen during the initial months of the 2022 inflation period,” it added.

Food inflation

With no signs of food inflation relenting in the immediate future, it is hard to see urban regions growing rapidly than the current levels, the research firm added. “We are expecting similar levels of growth to continue into the first half of the next year,” the report noted.

Despite the slowdown, average spends per household have grown to ₹6,761 in October quarter, up 13 per cent compared to the same period two years ago.

Rural regions

Meanwhile, the report also expressed some concerns regarding rural regions “underperforming”. At just 4 per cent in October quarter, the volume growth in rural regions has been slower than July quarter as well as trailing urban quarterly growth. Kantar attributed this sluggishness largely to slowdown in the wheat flour category. However, it added that non-atta rural FMCG growth was “stable linearly” and growing “seasonally”. It also noted that personal care categories in rural grew to 5.4 per cent in October quarter compared to 2.8 per cent in the year ago period, giving “more confidence in the rural markets.”

Agri industry

“There are some concerns over rainfall for the Rabi season, but still a major stress is not expected. The agriculture industry is expected to grow, and the government’s continued focus on rural development will help the rural shopper. Therefore, we do see a sustained rural performance despite inflation continuing at least in the first half of 2025,” the report noted.