Restoring Retail – A Smart Way to Increase Retail Sales as Markets Open

As we reach mid-year, tiptoeing our way while expecting the worst, a new dawn just might set in the context of the Indian CPG market. May 2021 saw sales taking a steep drop by 79% in comparison to pre-COVID-19 levels last year. However, with “unlock-downs” in place, retailers are hopeful of better days ahead.

So the best way forward for FMCG brands to capitalize on this opportunity is by chalking out market expectations. 

Here are the general market expectations:

1. As per Aditi Nayar of ICRA, the Consumer Price Index-based inflation which rose to an 83-month high, at 6.60% in May, is expected to stay above 5% for the rest of the fiscal year. This comes as an effect of the rising Wholesale Price Index, which reached 12.94% in May owing to the constant rise in the cost of fuel, including petrol, LPG, and high-speed diesel.  This means that the cost of essential commodities like eggs and pulses, will not drop anytime soon, ensuring that consumer spending on essentials stays up.
2. While many have lost their livelihood during the pandemic, many HENRY’s (High earners, not rich yet) are all set to enter their favorite stores and spend their spare cash. This means that given the fact that consumers found fewer options during the lockdown, they might be willing to explore varieties that can spice up their lives.
3. Consumer spending was limited during the lockdown. As local governments lift lockdowns, brands should engage in creative campaigns to encourage consumers to spend more. Smart merchandising with the most appealing and convenient placement of products for consumers could be one such initiative. 
4. While retailers are eagerly waiting to increase the number of footfalls in their stores, local governments have directed retailers to refrain from announcing sales or bonanzas that might attract crowds. This means that brands need to ensure optimum sales at MRP.