Inflation continued to hit FMCG industry ‘hard’ in June quarter: GCPL

‘Trend spurred price increases and affected volumes’

The country’s FMCG industry continued to be ‘hit hard by inflation levels’ leading to successive price increases as well as to an impact on volumes during the three months ended June, according to Godrej Consumer Products Ltd (GCPL).

In its update for the first quarter of the current fiscal, the FMCG player also said rural markets witnessed slower growth compared with urban segments.

The company would have ‘mid-single-digit volumes drop on a high base, with a 3-year volume CAGR close to mid-single digits,’ in the domestic market, as per the update.

"The Indian FMCG industry continued to remain soft during the quarter. It continued to be hit hard by inflation levels aggravating due to geopolitical tensions, leading to successive price increases and impacting volumes," GCPL said.

In recent months, inflation has been on the rise in most markets worldwide.

Among international markets, GCPL said that its Indonesian operations, which is the company's second-largest market after India, also faced an impact on consumption and margins.

"In Indonesia, with hygiene performance waning after COVID-19 and a large hygiene comparator in base, we expect a high single-digit sales decline. The sales performance excluding hygiene was largely flat," it said.