FMCG sales at organised retail stores grew 22% in 2018: Study

Chennai: The switch to goods and services tax (GST), acceptance of digital payments, and a consumer shift to convenience have helped push sales in modern retail stores in India, said a report.

Released by insights firm Nielsen India, the report titled “Reformatting Retail in India”, said, demonetisation and GST helped the country’s organised grocery stores register 22 per cent growth in sales, with cheese, biscuits, hair conditioners and packaged rice witnessing more takers. The report took into consideration the period between August 2017 to 2018.

“Demonetisation and the introduction of GST became tailwinds for the sector by triggering the mass adoption of digital modes of payment by consumers,” the report said.

The market for fast-moving consumer goods (FMCG) sold through modern retail stores in India stood at Rs 41,416 crore as of August last year, said the Nielsen report.

However, the overall contribution of supermarkets and organised grocery stores still remains 10 per cent of overall FMCG sales “with a greater concentration in urban areas, particularly the top 17 metro cities”.

“Advance setting of systems, across both buying and selling, helped modern trade gain sizeable growth advantage over general trade during the implementation of GST,” the report said.

In the same period, the number of organised grocery stores that Nielsen defines as ‘shops enabled with shopping aisles, a shopping cart, and have at least two such shops stood at 18,197.

In 2018, supermarkets grew 25 per cent, while hypermarkets grew by 15 per cent. Nielsen defines supermarkets as chain and stand-alone stores that have an area of less than 15,000 sq. ft and not more than nine point-of-sale counters. The rest, Nielsen defines as hypermarkets.

“In modern trade, per say, we’ve been seeing growth, be it in store count, be it in penetration, be it in footfall, as well as, what’s happening with the consumer,” said Ajay Macaden, head, retail, Nielsen India.

NT Bureau