With supply chains stabilising, FMCG firms record sales growth in June

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Fast-Moving Consumer Goods ( FMCG) companies have recorded sales growth in June and are optimistic that the growth will continue over the next few months, despite some challenges.

Firms expect overall growth in the April-June quarter, which was severely impacted due to the coronavirus-induced lockdown.

As per its quarterly update for Q1 FY21, Godrej Consumer Products Limited (GCPL) expects a “mid-single-digit, volume-driven sales growth” in April-June.

The Godrej group firm has recorded a “strong recovery” from mid-May and June across most of the markets where it operates.

There is a strong demand in the household insecticide category, while the hygiene segment too witnessed strong traction, GCPL said.

“Several FMCG companies have seen a marked improvement in the last month as production and supply chain is stabilised and lockdown restrictions are lowered across states.”

~Pinakiranjan Mishra, Partner and National Leader – Consumer Products and Retail, EY

Another homegrown FMCG firm Marico, while sharing its quarterly update, revealed that it recorded significant disruptions during the first fortnight of April but since then, has been able to steadily  resume operations to near-normal levels in June.

“With the Q1 top line translating into a single digit growth over the annual run rate of FY20, the company expects to bounce back to posting volume and value growth during the rest of the year,” said Marico.

FMCG companies have seen an improvement as production and supply chains have stabilised, said experts.

Some consumer durables companies have also reported growth in sales of household appliances like refrigerators, vacuum cleaners, microwave ovens and washing machines.

The sales of appliances have also shot up with people now confining themselves within their homes and investing in appliances that allow them to multitask and generally, make lives easier.

Consumers are opting for large-screen TVs to binge on entertainment which is driving the growth across markets, he said.

“Grooming products, especially the trimmers have seen a 5X growth during this period, as consumers are depending less on salons to ensure safety and hygiene. We are quite hopeful that the festive season will help us recover some of the losses incurred during lockdown.”.

~Suguru Takamatsu, Divisional Head – CSD, Panasonic India

Fuelled largely by rural demand, “y-o-y for month of June, our refrigerators (sales) grew by 40 percent, vacuum cleaners by 20 percent, microwave and washing machines (top-load) too saw an uptake of 44 percent and 24 percent respectively,” she shared.

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