According to Hindustan Unilever (HUL) chairman Nitin Paranjpe, India is facing the most difficult economic situation that results in inflationary demand.
This has prompted fast-moving consumer goods (FMCG) buyers to temporarily cut back on purchases through a period of price stickiness, which was declared ‘rare’ by the company.
“India is going through probably the most difficult situation. Inflation is high. We are trying to get into the situation where we have seen 14 consecutive months of the double-digit wholesale price of inflation,” Paranjpe told shareholders virtually during his annual address on Thursday.
“I do not know when we have seen something like this last. FMCG markets, which have generally been strong for a long period, have started seeing the effect of this,” added Chairman Nitin Paranjpe.
Hindustan Unilever is one of India’s leading fast-moving consumer goods (FMCG) companies, and inflation is testing its resilience, said Paranjpe at the annual general meeting of the country’s biggest consumer company.
“And we have seen market rates moderate and volume growth rates have actually become negative in the short term,” he added.
Consumer goods volume fell approx. 1% during the financial year 2022, according to the global consumer research firm Kantar Worldpanel, formerly IMRB. HUL expanded value sales by 11% last fiscal, mainly driven by the price increases as it tried to offset energy packing and transport costs that increased approx 50% from the past.
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The company said it would try to mitigate some of the impacts of inflation by driving savings instead of rising goods prices. The company nearly saved 7% of its annual turnover.
Moreover, the company is investing in technology and distribution, resulting in 15% expansions in reach.