Rising inflation is pushing poor and middle-class families in India to postpone purchases and reduce quantities of pricey items, ranging from electronics and appliances to edible oils and groceries, many companies have said.
Prices of edible oils have risen steadily recently and according to a report by Mint, supermarkets are seeing smaller bottles of 750 ml or 500 ml fly off the shelves, rather than the standard 1-litre bottle.
As the cost of manufacturing and transportation of goods has gone up due to Covid-induced disruptions to global supply chains and ebbing demand, companies have started selling smaller packets or economical versions of their products to help their consumers.
Edelweiss, in a December note, said that prices in the consumer goods market are at a 40-year high, citing the 18 per cent year-on-year hike by paint companies and a 7 per cent increase in HUL products etc.
Inflationary periods see more cautionary spending, Krishnarao Buddha of Parle Products told Mint. “The ‘rational’ buyers who are almost close to 40-45 per cent of the market—who typically work on a ticket size purchase—we have seen a bit of down-trading if it doesn’t suit their budget. So, while value-conscious is looking at premium range, rational consumers are down-trading," he is quoted as saying.
As discretionary spending falls, manufacturers are also hit and data quoted in the report suggests that 14 per cent of small consumer goods brands shut in the September quarter. Demand for packaged goods also fell during the same quarter.
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