FMCG cos worry over high inflation, squeezing urban mkt; hint price hike

COSTLY AFFAIR | Day-to-day items to get expensive

Leading FMCG companies reported a decline in margins in the September quarter on account of higher input costs and food inflation, which ultimately slowed down the pace of urban consumption.

Rising prices of commodity inputs such as palm oil, coffee and cocoa were also accentuated and some FMCG firms have hinted at a price hike.

HUL, Godrej Consumer Products Ltd (GCPL), Marico, ITC, and Tata Consumer Products Ltd (TCPL) have expressed concerns over squeezing urban consumption, which according to industry experts forms 65-68 per cent of FMCG total sales.

"We think this is a short-term hit and we will recover the margins through judicious price increase and stabilising of costs," said GCPL Managing Director and CEO Sudhir Sitapati in a Q2 earning statement.