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Pandemic forcing SKU reshuffle for grocery retailers: Report

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Nation-wide supply chain disruptions as a result of the Covid-19 pandemic are forcing India’s FMCG retailers to reorganise their merchandise mixes and assortments, said data analytics firm Nielsen in its Q1 2021 FMCG Snapshot report. FMCG/ grocery retailers are realigning assortment width and depth — either by lowering the number of SKUs per category or by lowering number of units for each SKU, the report says.

“As the pandemic has impacted supply chain dynamics, there are two opposing trends around realigning assortment by retailers. While retailers are willing to deal with a larger set of categories, they are doing so without putting any extra burden in terms of stocking space or capital requirements,” it said.

This phenomenon would have substantial implications for FMCG manufacturers in terms of which SKUs to push for and finding the optimum frequency for servicing stores, it added.

In the January-March 2021 period, FMCG sales growth from the traditional trade channels jumped to double digits, while growth in e-commerce normalised down to single digits in the January-March quarter.

“Now, that lockdowns have resurfaced, and with last-mile delivery boost up, the e-commerce channel will continue to be dynamic,” it added.