HUL Navigates Urban Demand Slowdown with Small Pack Focus

Hindustan Unilever Ltd is witnessing subdued urban demand due to macroeconomic factors, leading to a shift towards smaller pack offerings. While rural growth is gradually recovering, the company anticipates prolonged urban moderation. HUL plans measured price hikes in response to ongoing commodity price volatility.

Hindustan Unilever Ltd (HUL) is experiencing a distinct slowdown in urban demand, influenced by macroeconomic factors, and is observing a consumer shift towards smaller package sizes. The company's CEO, Rohit Jawa, highlighted during an earnings call that while rural areas show signs of gradual recovery, urban growth remains subdued.

Despite premiumisation trends, consumers are preferring smaller packs due to tighter household budgets. Jawa explained that this alteration in shopping behavior is not exclusive to HUL but is evident across the market. Although the trend is expected to be temporary, it continues to impact the sales dynamics.

The company has already initiated price hikes due to commodity price rises in areas like crude palm oil and tea. Executive Director Ritesh Tiwari mentioned measured future increases given the volatility, especially targeting tea and skin cleansing segments.

(With inputs from agencies.)