In­di­ans Cut Back on Con­sumer Sta­ples in Times of Cash Crunch

The Economic Times - - Companies: Pursuit Of Profit -

ET In­tel­li­gence Group: In­di­ans seemed to have skimped on soaps, hair oils and skin-creams to set aside cash for cig­a­rettes, al­co­hol, and fashion-wear when cur­rency con­trols were in place in the De­cem­ber quar­ter, up­end­ing con­ven­tional fi­nan­cial wis­dom that con­sumer sta­ples dom­i­nate the share of wal­let in times of stress.

Sales of soaps and in­sec­ti­cides dropped 6% and 2%, re­spec­tively, for Go­drej Con­sumer in the De­cem­ber quar­ter, and Dish TV’s av­er­age rev­enue per user dropped 6% to ₹ 151 due to de­layed re-or­der­ing of ser­vices. Sim­i­larly, sales of Emami’s Navratna oil and Fair & Hand­some whiten­ing creams fell 4% and 18%, re­spec­tively, ac­cord­ing to data dis­closed by the com­pa­nies. In par­tic­u­lar, the quar­ter marked the low­est sub­scriber ad­di­tion for Dish TV in more than three years,

ENCAMPMENT OF GYPSIES WITH CAR­A­VANS, while oral-care com­pany Col­gate from its pre­mium of­fer­ing in­wit­nessed its sales vol­ume con­tract creased 12%. Sim­i­larly, tex­tile com12% YoY in what is per­haps its pany Arvind’s brand­ing and re­tail worst-ever per­for­mance. di­vi­sion recorded 24% on-year in

By con­trast, sales of com­pa­nies crease in sales. Fur­ther­more, lead­man­u­fac­tur­ing non-es­sen­tial items ing con­sumer durables com­pany have been quite ro­bust in the Cromp­ton Greaves’ pre­mium fan De­cem­ber quar­ter. Cig­a­rette manusales in­creased 40% in t he fac­turer ITC recorded a flat vol­ume De­cem­ber quar­ter, and con­tribu­growth, while In­dia’s largest liquor tion of this di­vi­sion rose to 15% of com­pany United Spir­its’ rev­enues the over­all port­fo­lio.

The de­nom­i­na­tions move hurt the core con­sumer goods com­pa­nies, given the reliance of com­pa­nies such as Col­gate and Ba­jaj Corp. on the ru­ral and subur­ban markets. Ba­jaj Corp said its gen­eral trade was down about 12% and the mar­ket share it had gained in ru­ral markets prior to Novem­ber 8 fell by 1.5%, eras­ing pre­vi­ous gains.

Even in ur­ban ar­eas, vol­umes at can­teen stores de­part­ment (CSD) — cen­tralised stores that sell to de­fence per­son­nel — de­clined for many com­pa­nies. Emani wit­nessed a 12% drop in vol­umes from CSD pro­cure­ment in the De­cem­ber quar­ter and Ba­jaj Corp re­ported de­stock­ing from the CSD rev­enue stream.

Com­pa­nies with greater depen­dence on the whole­sale chan­nel re­ported sig­nif­i­cant stress from the cur­rency-ex­change ini­tia­tive.

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