Consumer goods industry grew by a marginally 1 per cent in volume in July-September quarter and most companies are now ready to sacrifice margins to mop up volume growth.
Companies have bombarded the market this festive season with the highest level of offers and promotions in five years to persuade consumers to loosen purse strings. Deals range from one-plus-one free offers to flat discounting of anywhere between 10-30 per cent, bundling different brands or increasing size at the same price-tag. “Promotions are at their highest in five years. With growth tapering off, the focus is on volumes and we expect the trend to continue over the next two quarters,” Dabur Chief Executive Sunil Duggal said. “We will intensify promotions further to push volumes. If there’s a trade-off in terms of erosion of margins, we are prepared for that.”