Prices of daily essentials and grocery products have risen by up to 40 percent in India, including edible oils, essentials, personal care, and home care products that consumers purchase on a regular basis.
Price increases have been large for categories such as atta, sugar, and other loose items due to increase in agricultural costs, while packaged goods have been able to avoid the price hikes by revamping their packaging in terms of net weight and other comparable variables, highlights a report detailing FMCG price inflation over the past year by SnapBizz.
Prem Kumar, Founder & CEO adds, “While consumers are forced to stay indoors, their monthly grocery bills have gone up. Their average payout may have increased by 5 percent, but since other expenses such as dining out, travel, and going to theatres have significantly reduced, the increase in grocery bills isn't impacting them too much. While Kirana stores have tried their best to provide consumers with all requirements, stocking has been a concern for them as demand for less expensive alternatives has gone up.”
Highlights of the Study:-
- Rice - Across all markets, there is an increase of 8-10 percent in price.
- Atta - Due to a hike in the prices of wheat, local brands have increased the price of atta by 8-15 percent whereas, for brands like Aashirvaad and Pillsbury, MRP remains the same but schemes are withdrawn and higher slabs to qualify schemes have been announced.
- Oil - Across all categories there has been a revision in the prices of oil. The highest rise is approx. 40-50 percent MRP pan India.
- Sugar - There is no major change in prices for the sugar category during the Covid-19 when it comes to Pune and Ahmedabad but in Mumbai, there has been a hike of approx. 5-8 percent.
- Dals - There has been no major change in prices for dals during Covid when it comes to Pune and Ahmedabad but in Mumbai, there has been a hike of approx. by 8-10 percent.
- Salt, Coffee, and Detergent Bars - There has been no price change.
- Biscuits – No price change but discounts have been withdrawn.
- Detergent Powders and Liquids – Prices increased by 5-7 percent across cities.
- Noodles – There has been no change in MRP but there is a reduction in weight. Maggi has reduced weight from 70gms to 60gms.
- Shampoos – There has been no change in the prices barring a few brands like Kelvin Care have hiked the price by 10 percent.
- Snacking - There has been an overall 8-10 percent increase in prices as oil cost has gone up drastically.
- Ready-to-Cook - There has been mixed feedback as there has been no change in prices of the local brands but nationalized brands like MTR have hiked prices by 2-3 percent.
- Floor Cleaners - There has been approx. 5-10 percent increase in prices.
- Toothpaste - Across Mumbai and Pune there has been no price change but in Gujarat, prices have been increased by 5-8 percent.
- Tea - There has been an increase of 15-20 percent across all the cities.
- Hand Sanitizers - The only category where prices have been reduced by approx. 20-30 percent as the government has waived off taxes.
- The supply of goods to the retailers from traditional wholesalers and distributors has seen no major change both during pre and post-Covid.
- When it comes to goods ordered to the distributors, there seems to be no digital ordering happening. It is all through the calls - retailers are ordering to suppliers - as the frequency of the visits by the sales team has reduced.
- Credit duration to retailers seems to have reduced in many cases, and some suppliers are collecting the cash upon delivery.
- The payment to suppliers is mostly being made online along with cash and cheques.
- Sales seem to have increased as compared to last year.
- The stocking of the products has reduced compared to the earlier times.
- There has been a significant increase in the working capital deployed by the retailers because of the drying of credit from the suppliers, this seems to be affecting the smaller outlets much more.
- Home deliveries have increased compared to the last year. The orders are being placed on calls, WhatsApp, or retailer’s own apps.
- The competition from modern trade/ e-commerce remains to be same.
- Customers are buying goods more than usual from retailers.
- Visits to the stores have reduced and the orders are placed through WhatsApp, calls, or the retailer's own apps.
- Most payments are done digitally to the retailers. Sometimes, customers prefer cash on deliveries also.