There may be an increase in the prices of grocery items in the coming days.
Rising prices of petrol and diesel due to the ongoing conflict in West Asia may increase the prices of packaged food items, daily essentials and household items in the coming months. Due to increasing cost of freight and raw materials, the profits of consumer goods manufacturing companies are decreasing. The recent change in fuel prices is expected to increase logistics, distribution and raw material costs for fast-moving consumer goods (FMCG) companies, TOI reported. These companies are already facing the pressure of 8-10 percent inflation. This situation has come to light at a time when consumer demand was showing signs of improvement after the GST rate cut last year, and companies like Nestle India and Hindustan Unilever had reported strong earnings in the fourth quarter.
Dabur increased prices
According to the report, several companies, including Marico and Dabur India, have already implemented price hikes of 2-5 per cent to offset rising costs, and are considering further hikes. Dabur India global CEO Mohit Malhotra told TOI that we have already implemented a 4 per cent price increase across various segments of the business, and going forward we will have to consider another round of price increases. He further said that the company expects inflation to be around 10 percent in this financial year.
Britannia and HUL gave indications
Officials from Britannia Industries and Hindustan Unilever also indicated during recent earnings calls that if inflationary pressures persist, further price increases could be considered. The media report quoted Parle Products Chief Marketing Officer Mayank Shah as saying that the price increase now seems certain, although its quantum is still being considered. Industry experts said in the report that rather than a one-time increase in petrol and diesel prices, prolonged fluctuations in crude oil prices pose a greater risk to consumer demand, especially in rural markets.
Nestle India’s statement
Naveen Malpani, partner and head of consumer and retail at Grant Thornton India, said in a TOI report that if fuel prices remain high for several quarters, companies may eventually resort to controlled price increases or reduction in grammage, which could slow the pace of recovery in consumer demand. According to the report, Nestle India UD Manish Tiwari said that we are monitoring these developments very closely. Changing prices is always our last option.
