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Stocks of fast-moving consumer goods companies to remain muted in the week ahead, as channel checks and corporate interactions point towards a slowdown in consumer spending. Our interactions suggest that slowdown is a reality. The trend of premiumisation has halted and companies are finding it difficult to exercise pricing power. Premiumisation is a term used to describe the phenomenon where consumers with rising disposable incomes spend more to upgrade to premium products. The report that this trend that has been prevailing over the last five years has slowed down, as high inflation has affected consumer spending. Frequent fuel price hikes have reduced the surplus available to spend on other items of consumption. The impact is pronounced due to moderation in disposable income growth as well as poor job markets.
Stocks of fast-moving consumer goods companies to remain muted in the week ahead, as channel checks and corporate interactions point towards a slowdown in consumer spending. Our interactions suggest that slowdown is a reality. The trend of premiumisation has halted and companies are finding it difficult to exercise pricing power. Premiumisation is a term used to describe the phenomenon where consumers with rising disposable incomes spend more to upgrade to premium products. The report that this trend that has been prevailing over the last five years has slowed down, as high inflation has affected consumer spending. Frequent fuel price hikes have reduced the surplus available to spend on other items of consumption. The impact is pronounced due to moderation in disposable income growth as well as poor job markets.
