Stung by popular protest, Britannia cuts cake prices

Faced with a mounting opposition from consumers to frequent hikes in prices in the FMCG sector, Britannia has been forced to step back and stick to its original price point of Rs 10 for its popular range of cakes in select markets.

The price hike from Rs 10 to Rs 12 had become a big turn-off as earlier pricing was convenient, several retailers in Kolkata told dna. “People were picking up the packs and then putting them back after realising that they have to shell out an additional 2 rupee coin,” a retailer said.

Britannia has been selling its bar cakes that come in flavours like orange, butter sponge, pineapple and chocolate at Rs 12 for a 60 gram pack -- the most popular size -- and also at Rs 25 for a 130 gram pack. The prices of the smaller pack have now been brought down to Rs 10, considered an attractive price point.

But this isn’t exactly a price cut as the grammage for Rs 10-pack has been cut down  from 60 grams to 50 grams.

Despite softening of prices of some of its inputs, Britannia has been continuously raising prices, which helped it post a standalone topline growth of close to 14% on year at Rs 1,594 crore during the second quarter, driven to some extent by a superior product mix. Gross margin rose a steep 390 basis points helped by all these factors.

The cut in the price point of the cakes is only to address consumer resistance as retailers pointed out that Britannia is even going to raise prices of its Cream Cracker brand for some packs by around 14%, traders said.