Expensive Basics

WHY AND HOW THE RECENT SURGE IN FMCG PRICES IS HURTING MIDDLE CLASS HOME BUDGETS AND COMPANY BALANCE SHEETS

- AJITA SHASHIDHAR AND SUMANT BANERJI

Thirty-five-year-old Kajal Roy has over the past few months been paying almost 50 per cent more for a five-litre can of edible oil. “It’s become extremely expensive. I checked out other brands but they are as expensive. One can’t run the kitchen without edible oil,” the home-maker says, while pushing her shopping cart through a neighbourhood supermarket in Mumbai. “My grocery bill has gone up substantially, but all of us are home-bound because of the lockdown, so we are hardly spending on anything else. Therefore, I am not complaining.”

In Nagpur, kirana store owner Rajesh Reddy has seen 70 per cent lower revenues for the past three months. He is not sure if the second wave of Covid-19 has led to a dip in consumption or it is the rise in prices of day-to-day essentials such as oil, pulses, tea, detergent and soaps that have resulted in lower spends.

“Consumers who used to earlier purchase five-litre jars of oil are buying one-litre packs. In detergents and soaps, they are either buying smaller packs or opting for cheaper brands,” says Reddy.

Covid 2.0 has not just consumed livelihoods, but an enormously high number of lives as well. This has dampened the urge to spend and consume, but as life begins to return to normal, the rise in grocery prices is hurting consumers. Commodity prices have been at all-time highs, making grocery products costlier by over 20 per cent.