India’s recovery from Covid-19 pushes June FMCG sales up nearly 40%

INDIA – India’s recovery from its worst wave of the covid-19 pandemic is being felt by the fast-moving consumer goods (FMCG) market where sales have recovered, more than surpassing sales recorded in the previous month. 

According to a report by ET Retail, FMCG sales expanded nearly 40% in June from a month earlier, overcompensating for a sharp decline in May when the segment fell by a third, helped by several states easing restrictions. 

Speaking to ET Retail, Krishnarao Buddha, senior category head at leading biscuits maker Parle Products, said: “Since April, there has been a gradual sales increase every month and June saw robust demand and recovery.”
 
According to sales automation firm Bizom, which tracks sales of 7.5 million retail stores across the country, the major driver of this growth in FMCG sales was the reopening of Kirana outlets in most states.  

Kiranas are small usually family-owned shops selling groceries and other sundries in India. They play a significant role in the economy as they account for 75-78% of the consumer goods market in India. 

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Operations of these establishments were however greatly affected by the localized lockdowns which started in April in a few markets, and more than two dozen states had restrictions and night curfews in May. 

According to ET retail, a fourth of all Kiranas were closed during this period resulting in the FMCG market falling by a third.  

With the restrictions being eased in many states, Bizom observed that there was a 32% increase in the number of Kirana outlets that reopened last month and a 6% increase in the average monthly purchase. 

These two factors buoyed sales for the month of June, resulting in the extraordinary rise in FMCG sales for that month when compared to May and April.  

While June sales are still down by a fifth compared to a year ago due to pantry loading in the base year, growth during the April-June quarter has risen 8%, ET Retail observed.  

Sales of June have made Buddha optimistic about the month of July. He said: “We expect sustained demand even in July although the base last year was extremely high when consumers hoarded packaged food and staples.”  

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