Unlikely weather in the north hits AC, ice cream, soft drink business

Manufacturers are worried as they have large stocks in place and due to lower demand the inventory of dealers is also rising

North India has witnessed unlikely weather in recent days, rainfalls have resulted in lower-than-normal temperatures. The dipping mercury has led to a drop in sales of air-conditioners, refrigerators, cold drinks, and ice cream. These products have seen a 26 per cent decline in sales year-on-year (YoY) since mid-March in the North, a report published in The Economic Times (ET) said.

Notably, North India accounts for more than 50 per cent of sales of summer products. Companies engaged in manufacturing these products are worried as they have large stocks in place and their inventories are piling up as a result of lower demand, the report added.

Managing director of Blue Star, a major air-conditioner and home appliances company, was quoted in the report as saying, "The summer has not picked up at all in the North except one week impacting demand there." He added, "Dealers are saddled with stock in the North."

The sales are down despite an earlier arrival of summer in February and heatwaves for several days last month in the eastern and central parts of the country.

Beverages sales also took a hit falling 26 per cent in April YoY, ET reported.

Amul has also registered disruptions in its sales of ice cream, milkshakes, buttermilk, and other such products. However, the MD of Amul said that having a pan-India presence gives some relief to our business.

It is important to note that summers account for more than 50 per cent of annual sales for products like air-conditioners, soft drinks, and ice creams. The unlikely weather conditions in the North are hurting these categories.