Modern retail grinds to a halt, almost

The modern retail trade recorded one of its slowest-ever sales growth in 2015 as consumers cut back on discretionary spends at supermarkets amid an economic slump, which was a major blow to the consumer products industry. The modern retail segment, which makes up 8% of total sales for FMCG companies, grew just 3% during the year, a sharp decline from the double digits over the last few years, according to data from insights company Nielsen.

In contrast, sales at grocers, who contribute 72% of overall FMCG sales, rose 10%. This is also because FMCG companies focused on smaller packages, which are mostly sold at local stores. Even chemists and smaller retailers such as panwallahs recorded higher sales growth over the year than modern retail trade, despite it having a higher base. Sagar Malviya takes a look at the state of the FMCG market.