Sanjeev Sharma & Jayshree Maji

New Delhi

There has been a significant slowdown in retail FMCG sales in October this year not seen since February 2007, according to a Morgan Stanley report based on AC Nielsen data.

According to the report, FMCG sales grew by 5.9 per cent year on year in October, slowest growth since February 2007 as compared to 14.8 per cent growth in first half of financial year 2010.

It says the top 10 players witnessed deceleration in sales growth, with sales in October growing by 1.7 per cent versus 9.9 per cent in first half of this financial year. These include HUL, Dabur, Colgate, Nestle, Godrej, Marico, P&G, Britannia, ITC and L’Oreal. Marico and Nestle witnessed the sharpest slowdown in revenue growth in October as compared to their growth in the first half.

All key categories witnessed a slowdown, with laundry bars and noodles leading the pack.

Other key categories such as tea, hair oils, milk powders, talcum powders, laundry powder and shampoo also witnessed a slowdown to their first half growth. The deceleration in soaps, toothpastes, biscuits, skin creams and chocolates was less pronounced. Tea volume growth was down 9 per cent, while soap volumes were flat in October.

There have been differences between some industry players and AC Nielsen over the FMCG sales data.

Financial Chronicle tried to contact industry players to get their version on the AC Nielsen data which points to a huge slowdown.

“Our products are seasonal. We have witnessed significant growth even in the rural markets. We have seen a significant 22 per cent growth in the first half of the year,” said PD Narang, group director of Dabur. “It is a common practice for the FMCG companies to dabble with the categories they want us to look at. They have discontinued only a few categories. However, the shipment data of client cannot be compared with the Nielsen data as we do not look at certain retail pockets like college canteens, school canteens or army canteens,” said a AC Nielsen spokesperson when contacted by FC.

sanjeevsharma

@mydigitalfc.com