Britannia To Hike Biscuit Prices To Beat Consumption Slowdown
Britannia Industries Ltd. plans to increase biscuit prices marginally in the third quarter of 2019-20 to tackle the slowdown that has taken a toll on its sales growth in value terms, a company official said on Thursday.
A consumption slowdown has prevailed in the Indian economy for five to six months now and the period till January will "not be easy", Vinay Subramanyam, marketing head at Britannia Industries, said in Kolkata on Thursday. "In the third quarter, a slight increase in prices will happen.” Besides the marginal price hike, the company would also go for cost optimisation, he said.
Britannia’s sales growth, in terms of value, has halved due to consumption slowdown in India, said Subramanyam. "We started seeing the slowdown 5-6 months back. The next 5-6 months are not going to be easy and there is lack of optimism.
Britannia is "watching the situation very closely and expecting a positive impact of the monsoon", he said.
"We have to be more efficient in operations, including reduction in logistics expenses. Despite the slowdown, the company had been gaining market share and will continue to focus on major brands," he said.
According to Subramanyam, Britannia's market share in the biscuit category stands at 33 percent, putting it in the leadership position. Eastern India is "an important market for the company", he added.
On Thursday, Britannia shares rose 2.51 percent to Rs 2443.55 apiece on the BSE while the benchmark Sensex shed 1.59 percent to end the day at 36,472.93 points.