28 September,2026 04:11 PM IST | Mumbai | mid-day online correspondent
Representational Image. File pic.
Amid a consumption slowdown, the fast moving consumer goods (FMCG) sector in the country witnessed a moderation in growth during the April to June quarter, with rural markets bearing the sharper impact, as their volumes declined 5 per cent, according to a quarterly report by NielsenIQ.
The rural volumes declined for a second consecutive quarter, registering a decline that was twice that of the urban volumes, it noted.
"A synchronised cost, mobility and rural-income shock weakened demand with rural bearing the sharper impact," it said, adding that the consumer confidence has been at its lowest level post COVID.
It noted that higher inflation due to the surge in fuel, packaging and freight costs has impacted consumption especially in the rural markets. It noted that the gap between the headline wholesale inflation and retail inflation indicates that the inflationary pressure has not yet been passed to the consumers.
"FMCG slowdown is no longer confined to core categories. Until Q1, '26, weakness was concentrated in a few categories. By Q2 '26 (June quarter), macro pressure is visible across a wider basket, creating a more systemic slowdown," the NielsenIQ FMCG Quarterly Snapshot for April-June 2026 (AMJ '26) said.
It noted that the slowdown in the sector moved beyond core categories, as 68 per cent of FMCG categories declined during the quarter under review, indicating that volume pressure has spread across the broader consumption.
According to Nielsen, FMCG segment that include vermicelli and noodles, packaged rice, hair oils and liquid toilet soaps, came under the least impact category.
Packaged atta, non-refined oils, utensil cleaners, and palmolein oils were classified as low impact, indicating muted momentum but relatively stable demand.
Iodised salt, biscuits, salty snacks and shampoo were placed in the medium impact category, where emerging headwinds were seen having a moderate negative effect on momentum.
It noted the pressure on home care, personal wash and edible oils segments, as washing powders and liquids, refined oils, detergent cakes and bars, and toilet soaps were among the categories classified as heavy impact indicating strong growth challenges.
The spread of category-level decline aligns with sharper rural distress, where overall volumes fell 5 per cent against a 2.1 per cent rise in prices, dragging rural FMCG value down 2.9 per cent.
In the June quarter, "traditional trade dragged rural FMCG into decline while organised trade sustained urban growth," it said.
In volume terms, traditional trade declined 6 per cent, while modern trade and e-commerce gained 17.5 per cent and 34.8 per cent, respectively, with expansion into non-metro markets.
While 68 per cent of e-commerce sales comes from metros, the non-metros are emerging as the next growth driver for e-commerce sector. It noted that non-metros are growing three times faster than metros in e-commerce.
E-commerce sector's share reached 21 per cent in the top eight metros and 25 per cent in southern metros, the report said.
