FMCG companies plans to light up festive season with pricing offers AND promotional schemes
onsumers shopping for groceries and other items of daily use can look forward to value deals that are about 10-15% cheaper this festive quarter compared with the last two years. Companies are planning a full-scale offensive with pricing offers and promotional schemes after two subdued December quarters in a row on account of demonetization in November 2016 and the goods and services tax (GST) rollout in July last year, both of which hit consumption hard. Wholesaler Metro Cash & Carry will offer discounts that customers such as kirana stores can pass on to consumers. The business-to-business wholesaler, which follows an October-September financial year, is also introducing an ‘own business day’ in October to drive traffic, aligning
with large companies including Procter & Gamble, Dabur, Colgate Palmolive and Nivea selling at discounted prices to neighbourhood retail outlets.
HUL will keep price-value equation intact
industan Unilever expects improvement in demand despite macros like the deprecating rupee and spiralling crude oil prices. The market has bottomed out and HUL saw from the period when they had two consecutive years of drought to now, certainly the volume growth has moved up. It is on an annual basis in the vicinity of 6-7%. Now if the crude remains where it is and with the Rupee depreciating, of course there will be headwinds as far as costs are concerned. There will be some price increase. But there is no one-to-one correlation between input price and the price of finished goods. HUL didn’t indicate pricing decisions. They are always circumspect when it comes to a pricing decision. Rural consumption, after it had reached a stage where it was growing more or less at par with urban, is now growing at a faster pace.
The things that the government has done - whether it is higher minimum support price (MSP) for crops, loan waivers or GST which resulted in companies like HUL passing on the benefit to consumers, all that augurs well for consumption.
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