India's consumer goods sales hits over one-year low on weak urban demand, report shows

Emami

08/08/2024 09:06

Aug 8 (Reuters) - Indian consumer products' sales slowed
sharply to a more-than-one-year low from April to June due to
softening demand for personal care products and packaged wheat
flour, especially in urban areas, market researcher NielsenIQ
said on Thursday.
    The overall sales volume growth slowed to 3.8% in the second
quarter, compared with growth rates of 6.4% to 8.6% in the past
four quarters, "largely due to macroeconomic headwinds,"
NielsenIQ said, without detailing the factors.
    India's retail inflation hovered around 5% in the quarter,
mostly due to high food prices, forcing consumers in the world's
most populous country to cut back wherever possible to make ends
meet.
    The sales volume growth in rural areas slowed to 5.2%, from
7.6% in the previous quarter, but fared better than urban
markets, where growth slowed even more sharply to 2.8% from
5.7%.
    The growth in rural pockets outpaced urban areas for the
first time in five quarters in the January-March period as
consumer majors including Dove-soapmaker Hindustan Unilever
 HLL.NS  trimmed prices to win back consumers.
    In the coming quarters, packaged goods makers including
rural-centric Dabur India  DABU.NS  and Emami  EMAM.NS  expect a
further boost, helped by better monsoon and higher government
spending, which usually translate to higher consumer spending.
    "The timely arrival of monsoon, coupled with a rural-centric
budget with a focus on rural infrastructure, agriculture and
employment is a key positive for the sector," Dabur CEO Mohit
Malhotra said on an earnings call earlier this month.
    The likes of Maggi instant noodles-maker Nestle India
 NEST.NS  and biscuits-manufacturer Britannia Industries
 BRIT.NS  are also betting on rural recovery by making their
products available at more stores.
    For the June quarter, though, consumer goods makers have
posted mixed results.
    Urban-centric Nestle India reported its slowest growth in
eight years as price increases drove consumers away, while more
rural-focussed Hindustan Unilever reported higher earnings as
price cuts boosted demand.

 (Reporting by Praveen Paramasivam; Editing by Savio D'Souza)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))