Coronavirus lockdown fallout: FMCG sales fell sharply in March last week, says Nielsen survey

A sharp fall in FMCG sales was recorded in the last week of March when the coronavirus lockdown started, a Nielsen India survey says. The majority of retail channels, except modern trade, took a hard hit in the period due to the lockdown, the data showed. The traditional trade, e-commerce and cash and carry saw a steep plunge in sales, it added. The only trade category that posted six per cent growth in the period was modern trade, which includes includes supermarket chains, hypermarkets, among others.

The sharp drop in sales was propelled by a shortage of sales staff at retail outlets and out of stock situations post lockdown, the report added. "India witnessed a similar surge in growth in the Modern Trade channel. However, for the dominant Indian channel of traditional trade, the surge in retail sales during the pre-lockdown period was not as high as that witnessed in the modern trade channels. This 17th April 2020 could be attributed to neighbourhood stores available at an arm's length, the limited purchasing capacity to load the pantry, and fall back options on commodities," the data by market researcher Nielsen India also showed.

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The report added that of all the four channels, e-commerce was the worst hit, registering 64 per cent fall in growth in the week ending March 29. In comparison, during the first three weeks of March, it reported a 103 per cent, 87 per cent, 85 per cent, growth respectively."

Among the key challenges for FMCG retailers amid coronavirus lockdown were stock replenishment and lack of retail manpower. "Retailers were facing severe constraints of stock replenishment as company salesperson visits were severely hit. From an average of 10 visits in a week, the retailers stated that now there were just 2 visits, on an average, during the lockdown period," the report added.

Most retailers (65% of sampled grocers and 35% chemists) were now procuring goods at higher rates from wholesalers in the absence of regular visits by salespeople. "This resulted in 8 out of 10 retailers not receiving adequate stock of products, resulting in some bit of stock-outs," Nielsen India data also showed.

Maximum growth was recorded in hand sanitisers category, which reported 340 per cent growth in overall trade. The packaged rice sale grew 28 per cent in March against the year-ago period. "Leading brands in these categories are not able to cater to the surging demand, thus the share of the top three players has gone down in both the categories of Sanitisers and Rice in March," the report said. The nationwide coronavirus lockdown that began on March 25 has now been extended till May 3.

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