NEW DELHI: As inflation in India continues to hit new highs, consumers are struggling to meet daily needs of food items. In just a year, cooking oil prices have shot up by over `30 a liter and in two years the same has nearly doubled. Similarly, other food items such as vegetables, dairy products, fish & meat, among other items, have also seen substantial price hikes.
“Since past few months, a large section of consumers are purchasing fewer items and a noticeable section is discarding items such as cheese and butter. This is a negative sign for the country as well as the retail/FMCG industry,” a senior executive of a prominent grocery chain told TNIE.
Retail inflation soared to a 17-month high of 6.95% in March, while wholesale price-based inflation spiked to a 30-year high of 14.55% in the same month. As per the Consumer Price Index (CPI), inflation in ‘oils and fats’ segment was up 18.79% in March’22, spices 8.5%, vegetables 11.64% , and meat and fish 9.63%.
While this sharp jump in inflation is attributed to the disruption in the global supply chain caused by the Russia-Ukraine war, prices of many food items in India have been going up much before this conflict due to different reasons. In the last one year, every FMCG player implemented more than one price hike across their product range to pass on the rising input cost. This decision seems to have deteriorated consumer sentiments further as their monthly budget was already dilapidated by a record rise in petrol, diesel, and cooking gas prices.
Debopam Chaudhuri, head, Research and Ratings, TruBoard Partners said that heavy inflationary pressures across major consumables like the entire food basket, clothing, and energy needs of an average consumer will force her to reallocate spending away from discretionary to necessities. “It is critical to bring food inflation below 6%,” added Chaudhuri.