New Delhi | Kolkata: Sales of large grocery packs, soft drinks, refrigerators, air conditioners, and smartphones fell 5-25% in the September quarter as many consumers deferred purchases anticipating lower prices in the new goods and services tax (GST) regime, industry executives said, citing data by research firms NielsenIQ, Counterpoint, and internal estimates.
Sales of value packs of daily consumption items remained unchanged from a year earlier at 13%, while sales volume fell 5% in the three months ended September 30 amid the transition to lower GST rates, and heavy monsoon rains in several parts of the country, executives said, citing data by NielsenIQ and internal estimates.
Volume sales of televisions and home appliances too declined by 3-4% on-year in the September quarter while staying flat by value, the executives said. This is despite the surge in sales of premium products since September 22 when the new GST rates came into effect on large screen TVs, dishwashers, and ACs. "The GST transition which resulted in disruptions, unseasonal rains impacting summer-centric categories like soft drinks, and continued inflation of palm oil dented sales and profitability through the quarter," said the chief executive of a listed FMCG company. "However, we expect sales to pick up over the next two quarters on account of GST price benefits," he added. The executive asked not to be named due to the mandatory pre-earnings silent period.
NielsenIQ has still to officially publish its July-September data.
Notably, rural demand continued to outpace urban, though the gap has narrowed. Soft drinks saw the steepest decline among all FMCG categories in the quarter, declining 25% year-on-year, the data showed. Smartphone sales too lagged shipment growth as many consumers deferred purchases in the GST transition period, expecting a price cut later, said Tarun Pathak, research director at Counterpoint Research. GST on smartphones, however, remained unchanged at 18%.
As per initial estimates by market researcher Counterpoint Research, smartphone shipments from brands to trade grew by 7-9% in the July-September period as brands started filling the channel with festive inventory ahead of Diwali which falls in October.
Hindustan Unilever (HUL), the country's largest consumer goods company, said in a business update on Friday that the revised GST rates hit sales in September as consumers held back purchases expecting lower prices. "This has led to a short-term impact on sales for the company in September. Given our existing pipeline inventory in the channels, we expect this impact to continue into October as well," the maker of Lux soap and Red Label tea said in its quarterly update.
HUL noted that it was a one-off, transitory impact and it expects recovery starting November, with prices stabilising, underpinned by rising disposable incomes. Executives are optimistic about the outlook for the fiscal second half following the GST-related benefits across sectors.
Add Now!
Sales of value packs of daily consumption items remained unchanged from a year earlier at 13%, while sales volume fell 5% in the three months ended September 30 amid the transition to lower GST rates, and heavy monsoon rains in several parts of the country, executives said, citing data by NielsenIQ and internal estimates.
Volume sales of televisions and home appliances too declined by 3-4% on-year in the September quarter while staying flat by value, the executives said. This is despite the surge in sales of premium products since September 22 when the new GST rates came into effect on large screen TVs, dishwashers, and ACs. "The GST transition which resulted in disruptions, unseasonal rains impacting summer-centric categories like soft drinks, and continued inflation of palm oil dented sales and profitability through the quarter," said the chief executive of a listed FMCG company. "However, we expect sales to pick up over the next two quarters on account of GST price benefits," he added. The executive asked not to be named due to the mandatory pre-earnings silent period.
NielsenIQ has still to officially publish its July-September data.
Notably, rural demand continued to outpace urban, though the gap has narrowed. Soft drinks saw the steepest decline among all FMCG categories in the quarter, declining 25% year-on-year, the data showed. Smartphone sales too lagged shipment growth as many consumers deferred purchases in the GST transition period, expecting a price cut later, said Tarun Pathak, research director at Counterpoint Research. GST on smartphones, however, remained unchanged at 18%.
As per initial estimates by market researcher Counterpoint Research, smartphone shipments from brands to trade grew by 7-9% in the July-September period as brands started filling the channel with festive inventory ahead of Diwali which falls in October.
Hindustan Unilever (HUL), the country's largest consumer goods company, said in a business update on Friday that the revised GST rates hit sales in September as consumers held back purchases expecting lower prices. "This has led to a short-term impact on sales for the company in September. Given our existing pipeline inventory in the channels, we expect this impact to continue into October as well," the maker of Lux soap and Red Label tea said in its quarterly update.
HUL noted that it was a one-off, transitory impact and it expects recovery starting November, with prices stabilising, underpinned by rising disposable incomes. Executives are optimistic about the outlook for the fiscal second half following the GST-related benefits across sectors.
Add 
as a Reliable and Trusted News Source
as a Reliable and Trusted News Source Add Now!
