New Delhi ,jan 5
As part of their efforts to navigate through the troubled waters against the backdrop of sluggish consumption demand in the overall economy, businesses in the Fast-Moving Consumer Goods (FMCG) and retail space are preparing strategies for the upcoming quarter of financial year 2025.
In the second quarter, many FMCG and retail companies witnessed the heat of sluggish consumption, which was even visible on their balance sheets. Going further, the anticipation is that the third quarter of the current fiscal year will not bring much respite, and consumers’ purchasing power is likely to remain constrained, Nomura said in a report.
The report further added that inflation in select pockets owing to food prices and some commodities (such as palm oil) may affect the spending power of the consumer.
It highlighted that most companies could pass on commodity costs post-COVID-19 until 2025 due to high demand for their products; however, given slow demand, the tide has turned, and expectations are that margin risks may arise mostly due to higher competition.
Any rise in commodity prices would be difficult to pass on in such a scenario, it added.
FMCG and retail companies are navigating a challenging market environment either by adjusting their pricing strategies or expanding product lines.
Sundeep Bajoria, Vice President of Franchise Operations at Coca-Cola India, said the company’s resilience has been fuelled by its dynamic pricing model and robust distribution network.The company’s diverse products, dynamic pricing, and strong distribution network remain attuned to consumer preferences, he added.
“With rural India witnessing a demand upturn, our well-connected traditional and modern retail ecosystem, along with AI-powered tools like Coke Buddy, are expanding accessibility and convenience. In urban markets, we’re steering beverage sales by aligning with top Q-com platforms, adapting our supply model in real-time, and reimagining how consumers interact with the brand,” Bajoria said.
While Manish Aggarwal, Director, Bikano, Bikanervala Foods Pvt Ltd, stated that the company is taking a proactive approach to prepare for future economic shifts by refining its product lines, pricing models, and distribution strategies. “We’ve expanded our portfolio with innovative products that cater to changing consumer tastes, especially during festive seasons,” he added.
