Disha's Weekly Wisdom: FMCG firms to hike prices as commodities get costlier

Due to inflation, rise in demand and supply in certain areas of the country, and consumers’ reduced purchase of FMCG products, some of the major FMCG companies plan to increase their product costs.

27 Feb 2024 | By Disha Chakraborty

The price growth in the sector fell to 2.7% in 2023 from 10% in the previous year

Owing to the inflation and higher wages, products will see a 2-4% hike in their prices. Dabur increased prices by 2.5% of the food products. Emami is planning a 3% hike.

In the food segment, cereals, spices, and honey have witnessed substantial increase in the
product prices. This happened because in the past few quarters, companies have reported higher volume growth than value growth due to the fall in prices and overall ordinary demand.

A recent report by NielsenIQ predicted the price growth in the sector fell to 2.7% in 2023 from 10% in the previous year owing to the decline in prices of the products. 

A few areas of the country witnessed downfall in FMCG purchase while a few areas witnessed high demand and supply. This was brought about by the Household Consumption Expenditure Survey (HCES).

Economists say that the difference between urban and rural  households' monthly per capita consumption expenditure (MPCE) does not necessarily depict the income or poverty conditions of households. 

Inflation is predicted to be a factor in the difference between the MPCE. Till August 2023, for 11 years, the rural inflation rate was 91.2%. While the rate of urban inflation was 88.5% during the same period.

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