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FMCGs sales take an average 15% hit as consumer demand falls

Sticking to the old methodology and base year, our market survey and simple regression model revealed that inflation will decelerate by 1.24% to 32.11% from 33.35% in January. The data shows that using both the old and new methodology, inflation is moving in the same direction, i.e. declining. However, the disparity in the magnitude is quite significant. This trend is driven by a reduction in fuel prices and low consumer demand due to income constraints, which has led to an average of 15% decline in the sales volume of Fast-Moving Consumer Goods (FMCGs).

Traders stockpile goods – Betting on price increase

Of the commodities tracked, the following stood out in their decline – 50kg bag of rice (₦100k down to ₦95k), 50kg bag of flour (₦65k down to ₦60k). and a bag of Irish potatoes (₦200k down to ₦180k). We also noticed that 82.86% of the commodities in the basket were flat, particularly eggs (₦6k) and vegetable oil (₦19,500), while 5.71% recorded an increase. In general, there was clear evidence of price disinflation. Traders are holding onto inventory, hoping that prices will rise.

The question that arises is “why this trend, and how long will it persist”? In our view, as long as petrol prices remain below ₦900/litre and the naira trades between ₦1,550/$ and ₦1,600/$, this trend is likely to continue until Easter.

The FDC Think Tank shares its estimates for February inflation and the likely policy reaction in the download and link below.

Enjoy your read!