Urban FMCG demand slows but stays ahead of rural in Q1FY26: Report

Urban FMCG volume growth slowed to 4 per cent in April-June but continued to outpace rural demand as uneven rainfall, seasonal shifts hit foods and personal care

Urban demand growth slowed in the April–June quarter for fast-moving consumer goods (FMCG), but continues to grow at a higher pace than rural, according to Worldpanel by Numerator (formerly Kantar Worldpanel).

 

In the quarter ended June, urban demand in volume grew at 4 per cent, slower than the January–March quarter where it grew at 4.4 per cent. Rural demand grew 3.2 per cent, which was higher than the demand seen in the January–March quarter at 2.7 per cent.

 

“Urban continues to lead rural in growth at both the MAT (moving annual total) and quarter levels. There are reports of uneven rainfall affecting agricultural output. To what extent this would impact rural consumption is as yet unclear. For the next quarter, however, we expect urban to continue outpacing rural,” said K Ramakrishnan, managing director, South Asia, Worldpanel by Numerator.

 

At an all-India level, FMCG demand grew 3.6 per cent in the April–June quarter compared to 3.5 per cent in the January–March quarter. On a MAT June basis, FMCG grew at 3.9 per cent, down from 5.7 per cent last year.

 

“This slowdown is primarily led by foods, whose growth reduced from 6.5 per cent to 3.9 per cent. Even the quarterly growth for foods and beverages this summer stood at 3.3 per cent against a 5.2 per cent growth last year during the same period. However, much of this is due to atta, which registered 4 per cent growth while it had grown in double digits last year,” Ramakrishnan said.

 

In beverages, bottled soft drinks — which grew in double digits over the last couple of summers — saw a slowdown too. The April to June 2025 growth for the category stood at 1.5 per cent against 26 per cent last year. This slowdown in the key season meant that MAT June 2025 growth dropped to 5 per cent from 28 per cent last year.

 

“However, given the early monsoon in parts of the country and a milder May and June, the demand for soft drinks itself was perhaps tamer this season,” Ramakrishnan added.

 

Talcum powders, which also typically see high demand during the summers, witnessed a 3.6 per cent volume loss this year compared to 13.6 per cent growth last year.

 

“The decline is even more accentuated this summer, with April–June 2025 falling by 14.5 per cent. However, the category has been volatile over the last few years and is expected to remain so. This time, grooming categories like deodorants and hair oils have also seen a slowdown, causing the deceleration we see for personal care,” he said.