PocketPinch: Price Of Daily Essentials Are Soaring High

• In the last 12 months, essential products have climbed substantially.
• Essential products and grocery products including edible oils, essentials, personal care and home care products peaked 40 percent in India.

Price Hike

The price increases have been largely for categories such as atta, sugar, and other loose items such as pulses and spices due to increase in agricultural costs.

Packaging Revamp

• Packaged goods avoided the price hikes by revamping their packaging in terms of net weight and other comparable variables.
• There is no change in MRP for noodles. Brands like Maggi have reduced weight from 70 gm to 60 gm per pack.

Snacking Items Price Hiked By 8–10% Since Price Of Oil Spiked Sharply Detergent Powders and Liquids Price Hiked By 5–7%

No Price Change

No price change in categories like salt, coffee, detergent bars.

Biscuit prices remain the same but discounts/schemes have been withdrawn.

The only category where price is reduced by approximately 20–30 per cent is hand sanitizers, since the government has waived off taxes.

How Much Hike

Several brands are on a hike spree with Amul and Mother Dairy being the latest. Both spiked the milk price by 2 per litre in July 2021. HUL increased prices of Lifebuoy and Lux by 6–7percent. In the last two quarters, Marico raised the price of Saffola by 50 percent.

Why The Price Hike?

Rising cost of raw materials and agricultural costs is what is driving the price hike by packaged consumer goods companies. For instance, the rise in palm oil prices, a key ingredient for most home and personal care products including soaps, has witnessed a 40–50% inflation, resulting in a spike in several products.

Consumers Switching To Less Expensive Alternatives

With prices going up across several categories, consumers demand for less expensive alternatives.

FMCG Sector Growth

With the increase in prices, the FMCG sector’s revenue growth is expected to double this fiscal year to 10–20%. This would be the highest growth rate in the past three fiscals.

Will The Prices Still Soar High?

According to the latest trends, the prices are said to increase further. But with revenue growth bouncing back, some experts hope that prices may return to normalcy very soon. Above all, the rise in prices of daily essential items is making life difficult for the common man.