FMCG urban sales growth outpaces rural in 2025, overall expansion slows to 4.1%

Kolkata/Mumbai: Fast-moving consumer goods (FMCG) volume growth in urban markets moved a tad higher to 4.6% in 2025 from 4.5% in 2024, latest data shared with ET by research firm Numerator, formerly known as Kantar, showed. In contrast, rural growth decelerated sharply to 3.6% in 2025 from 5% a year earlier, dragging overall FMCG market expansion down to 4.1% last calendar year from 4.7% in 2024.

Industry executives said this marks the first time in several quarters that urban markets have outpaced rural regions in sales growth across daily essentials, groceries and personal care products, while exuding confidence that overall FMCG growth rates will improve this year.

Data from Numerator, which tracks both branded and unorganised segments including unpackaged bulk commodities showed that demand was subdued in the October-December quarter. The anticipated boost from the GST rate cut has yet to translate into a meaningful pick-up in consumption.


However, the research firm expects momentum to strengthen through the current calendar year, projecting overall FMCG growth to accelerate to around 5% by mid-2026.

Mohit Malhotra, recently elevated as Dabur's global chief executive, said gradually the sentiment and consumer confidence levels are improving. "The subsequent quarters are going to be better, because the first quarter was hit by the (poor summer) season, second quarter was hit by GST, third quarter has been significantly better, and the fourth quarter would even be better. And I think we will start on a firm footing as far as the next year," he said.

India's largest FMCG firm Hindustan Unilever's chief financial officer Niranjan Gupta told analysts earlier this month that looking ahead, the operating environment will remain conducive for a sustained recovery in consumption.

"We expect growth in FY27 to be better than FY26," he said.

FMCG volume growth moderated to 4.5% in the October-December quarter, compared with 4.6% in the corresponding period of 2024, and 4.7% in the July-September quarter of 2025, according to data from Numerator.

The research firm attributed the sequential and year-on-year softening to a diversion of household spending following the GST rate cut. While the tax reduction spurred purchases of heavy durables and automobiles, discretionary spending appeared to shift away from everyday consumer goods. Additionally, part of the festive season demand was advanced to September this year due to an earlier onset of festivities, impacting fourth-quarter volumes.

K Ramakrishnan, managing director, South Asia, Worldpanel by Numerator, said the GST reforms for the FMCG market were always expected to impact in the long term rather than in the near term.

Industry executives also said that with companies yet to fully roll out lower-priced inventory till about November, consumers deferred purchases in anticipation of revised stock, leading to softer volumes during last quarter.

Ramakrishnan said he expects 2026 to continue a slow but steady growth upward, and annual growth reaching 5% mark some time towards the late first half. "Categories where we have seen high growth are expected to normalise in growth, given that they are becoming larger now, which is one of the reasons growth will be slow at the FMCG level, but that is not bad, per se," he said.

Godrej Consumer Products chief executive Sudhir Sitapati told analysts recently the GST price drops have helped, and it will only help further in the subsequent quarters. Data from Numerator showed that several essential categories saw a slowdown in the latest quarter compared with the year-ago period. Segments such as home hygiene, convenience products, floor cleaners, utensil cleaners and cooking oils recorded softer growth, reflecting tempered household spending.

In contrast, discretionary food categories demonstrated resilience. Snacking continued to edge higher, posting growth of nearly 6% in the quarter. Soft drinks also staged a recovery, with demand improving toward the end of the year, indicating a gradual revival in impulse-led consumption.