Now Reading: FMCG firms signal price hikes in Q2 as input costs persist
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FMCG firms signal price hikes in Q2 as input costs persist
Leading FMCG companies including Britannia, Godrej Consumer Products, Dabur India, and Hindustan Unilever are planning price hikes in the September quarter, ranging from 2 to 5 per cent, as input costs rise…
The Story in Brief
Leading FMCG companies including Britannia, Godrej Consumer Products, Dabur India, and Hindustan Unilever are planning price hikes in the September quarter, ranging from 2 to 5 per cent, as input costs rise due to commodity inflation and geopolitical uncertainty. Britannia expects to add 1.5-2 per cent through shrinkflation in its Rs 5 and Rs 10 biscuit packs, citing higher sugar and palm oil prices. Godrej Consumer may implement similar increases but is waiting for clearer commodity cost trends. Dabur India said elevated input costs will persist, prompting calibrated price hikes alongside cost efficiency measures. HUL expects sequential inflation of 2-5 per cent and will continue calibrated pricing actions to protect margins.
Despite the cost pressures, companies report resilient demand, with Britannia's managing director noting a strong demand environment. Godrej Consumer's revenue growth has exceeded original expectations. Dabur remains confident of double-digit revenue growth in FY27. However, HUL warned that volume growth may face pressure due to inflation. The FMCG sector had taken an average hike of 2-5 per cent in the June quarter and is now using shrinkflation or selective pricing in the current quarter to protect margins, while monitoring crude oil volatility and weather risks such as the monsoon.
The Indian Opinion
The narrative that FMCG companies are merely 'passing on costs' hides the reality of shrinkflation, reducing pack sizes without lowering prices. For ordinary Indians, a Rs 5 biscuit pack that shrinks is a tax on the poor, who rely on these staples. Meanwhile, the same companies post robust profits and talk of 'premiumisation'. The real test is whether volume growth holds up once these price increases hit household budgets. Will the 'resilient demand' survive when every trip to the kirana store costs more for less? That number will settle the debate.
Source: thehindubusinessline.com
This story was synthesised by AI from the source linked above.
