mumbainew delhi sales of consumer goods slowed close to a 10year low suggesting that indians are making deep cuts in spending and preparing for things to get worse before they get better amid high inflation and an economy thats yet to show any sign of revival companies meanwhile are torn between the need to raise prices due to escalating raw material costs and putting a bigger squeeze on margins to somehow spark a revival in demand and stop customers from striking more items off their shopping lists growth by value slowed to 73 in august from 211 a year earlier according to nielsen while most companies have been posting slower sales growth for more than a year now the overall fmcg segment grew nearly 11 in the last financial year see table while indias biggest cities have been hit the hardest rural and other areas are also feeling the slumps effects the fmcg market is growing the slowest in the metros a clear indication of the impact of urban inflation said vijay udasi executive director of nielsen india although rural and middle india are the most significant contributors to growth they are not completely insulated by the slowing economy indias economic expansion slowed to a decade low of 5 in fy13 and a fouryear low of 44 in the quarter to june triggering a spate of downgrades in fiscal year growth forecasts lagged impact of gdp growth slowdown high inflation and poor consumer sentiment are the key factors responsible for the slowdown said gautam duggad of motilal oswal securities to be sure the government has rolled out a series of measures aimed at improving the investment climate besides pinning its hopes on higher exports and a good monsoon giving a boost to the economy in the second half of the fiscal companies too are hopeful about indias longterm consumption story volatility is the middle name of emerging markets the key is to bounce back we will play the portfolio to aim for value share and quality growth sanjeev chadha ceo of pepsicos asia middleeast and africa amea region told et last week in terms of overall growth im not happy with the current macroeconomic trends in india but i am a believer in the longterm growth opportunity he said the harvest bounty resulting from a good monsoon should bolster rural consumption in the second half of fy14 analysts said rural indias spending is growing 45 percentage points faster than that of urban areas as consumers in cities shift from premium products to buying cheaper goods companies such as dabur are taking advantage of this it has more than doubled rural reach to 34000 villages from 14000 earlier dabur with 48 of its domestic fy13 revenues from the rural market offers the best exposure to this growth while firms like hul and nestle india face bleaker volume prospects in the near term according to a barclays research report companies with massmarket portfolios also hope consumers will continue to buy staples