Hindustan Unilever Limited, having always boasted of over 1200 stock keeping units or different pack sizes across categories, is now planning to cut down the number of packs in most of these categories and the global slowdown is being blamed.
Harish Manwani, chairman of HUL, said, “This is an ongoing process and we will reduce the number of stock keeping units, but the overall aim is growth."
That's because HUL claims that only 20 per cent of its pack units gives them over 70 per cent of its total revenues and the rest has a mediocre share in the overall growth, clearly a target now for chopping.
The Indian FMCG space has seen a decline of over 20 per cent in terms of stock keeping units this year vis-a vis last year, according to a recent report by Datamonitor and HUL is not the only culprit.
Even companies like Dabur, Marico and P&G have hit the pause button on new launches and have cut back on their existing pack sizes. But with HUL going all out towards cost reduction, the visibility of its products on the shelf space could now take a back seat, something that no FMCG company can afford in a competitive scenario like this.