Consumer goods firms cautious about launches
Large firms have shifted their focus towards lower end of consumption basket where they are seeing potential for further growth.
Mumbai: While the impact of demonetisation on consumer demand seems largely over in urban areas, firms are still cautious in launching new products, which are high risk and involve high cost.
Large firms have shifted their focus towards lower end of consumption basket where they are seeing potential for further growth.
According to Nitin Mathur, equity analysts at Jefferies, the consumer goods firms are apprehensive about discretionary consumption taking a hit if the unorganised sector isn’t able to recover quickly and unemployment situation worsens.
“Acceleration in low end of consumption is witnessed across categories (Dosa chains are growing faster than burger chains and they have a bigger market) and companies are trying to capture that through lower priced stock keeping units to increase penetration and drive volume growth, especially in rural markets,” he said.