I think the visibility/availability issue has been around for some time. Been a point of discussion on this thread for as long as I can remember. Many people have cited the issue of them using the cigarette distribution channel.
Another thing to ponder over: what if the management is trying to prioritise margins over availability and accelerated sales growth – which is obviously not optimal as you are looking for short term margin expansion over brand longevity and growth.
You give distributors and retailers lower margin and don’t pay for prime placement etc. – and in turn you can show more margin expansion in the short run.
As a rule of thumb – I expect FMCG margins (across the industry) to not increase much going forward as a result of:
- higher penetration of organised retail (changing bargaining power of the companies, distributors and retailers)
- More DTC competition (think about the incremental customer cohorts they can take and also take the benefits of the premium-isation)
- More private label products (cheaper and good quality products for customers, equal or better margins for the retailer)
FYI – Regarding margins I said ‘not increase much’ and not ‘decrease’
Anyone with multiple occasions of ordering over their website/portal? I just don’t see how that would be sensible for either ITC or the customer.
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