FMCG sales drop 34 pc in April; e-commerce, cash & carry show recovery in lockdown 2.0: Nielsen

The FMCG industry witnessed a sharp 34 per cent drop in sales in April due to mobility restrictions and supply side challenges during the lockdown, after registering single-digit growth in the first quarter, according to market insights firm Nielsen.

The decline was mainly on account of lower sales in traditional retail channels such as grocers, chemists, neighbourhood shops and cosmetics stores, while modern trade like hypermarkets and big retail chains continued to grow in April 2020.

Traditional retail witnessed a decline of 38 per cent in April due to area/shop closures. On an average, a traditional retail shop was closed for 12 days in April due to various restrictions and constraints.

This number was significantly higher for outlets other than chemists and grocers, Nielsen said in the third edition of its report on FMCG sector after COVID-19.

On the other hand, modern trade continued to grow at around 5 per cent in April 2020 although consumer buying behaviour in organised trade saw shifts from pre-lockdown period to successive lockdown stages (Lockdown 1 : March 23 to April 12 and Lockdown 2: April 13 to May 3), it added.

The FMCG industry increased sales in the weeks prior to the lockdown announcement across organised retail and organised wholesale channels.

"...as we entered the lockdown phase, we saw a steep decline in sales across channels. This was caused by mobility restrictions and supply side challenges," Nielsen said. "Modern Trade sales continued to slow down as we moved from phase I to phase II of the lockdown."
Citing a consumer study done from April 10 to 14 among 1,330 respondents across 23 cities, Nielsen said "more than half of the respondents said they will be avoiding non-veg food as a precautionary measure."