Sales of fast moving consumer goods grew 79% during fourth week of March when the government first ordered a nationwide lockdown for 21 days, according to Kantar Worldpanel, a global consumer research firm owned by communications and advertising g...
Mumbai: Purchase of daily household essentials and groceries in cities rose significantly in the weeks when lockdown and its extension were announced, indicating panic buying in short spells.
Sales of fast moving consumer goods grew 79% during fourth week of March when the government first ordered a nationwide lockdown for 21 days, according to Kantar Worldpanel, a global consumer research firm owned by communications and advertising giant WPP. While the following week saw a sharp decline at 47%, the market saw purchase soar again by 239% during third week of April, which coincided with the lockdown extension announcement.
“Nearly 50% of the month’s FMCG is bought in the first week of the month. We see intensifying growth culminating with a very steep growth towards weeks when the lockdown was announced,” said K Ramakrishnan, South Asia MD at Kantar. Most consumer goods companies ramped up production in March to meet the steep rise in demand with people rushing to stock up on essentials and groceries in bulk amid fears of a lockdown due to the coronavirus outbreak as several states imposed stringent curbs on movement.
That was also because consumer goods sales slowed sharply in January and February from the year earlier and production was in line with falling sales growth.
“After the initial supply issue, we saw consumer hoarding essentials frequently compared to usual stockpiling where there is a lull after shopping,” said B Krishna Rao, senior category head at Parle Products, India’s biggest food company. “We expect the market growth to slow down after lockdown ends because most consumers have stocked up for months.”
While companies including Hindustan Unilever and Marico posted declining sales during the quarter ended March, they said clarity on actual demand will emerge only when operations normalise.
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“Whenever there's a crisis and when you sense there will be a shortage due to supply issues, then you would think to lay your hands on as much as you can,” Sanjiv Mehta, chairman of HUL, had said during an earnings call.
