Aug. 8 - The world's biggest food group has missed half year forecasts and trimmed its 2013 target after cutting prices in Europe to lure recession-hit shoppers. As Hayley Platt reports their fortunes contrasted with rival Danone.
4.1% is today's daily digit - disappointing first half sales at Nestle. The figures suggest a sharp slowdown in second quarter growth to the lowest rate in more than three years Price cuts at the world's biggest food group have failed to tempt Europe's recession-hit consumers. As a result The Swiss-based company has been forced to trim it's full year target by a fifth to around 5 percent. And even that could be a stretch says Chris Hughes from Reuters BreakingViews. SOUNDBITE: Chris Hughes, EMEA Editor, Reuters Breakingviews, saying (English): "You do wonder whether it needs some greater management discipline, more focus, maybe some sort of reorganisation in terms of the management of the business because when you get that big it's always going to be hard to grow it." Sales were relatively healthy in Germany and the UK but spending was weak in many other western European countries. Much of Africa saw growth as did China, Malaysia and Indonesia. But overall figures for emerging markets fell 0.2 percent to just over 8 percent. SOUNDBITE: Chris Hughes, EMEA Editor, Reuters Breakingviews, saying (English): "Nestle like many companies is finding that the emerging markets is not a free lunch if you like in terms of delivering really decent growth when you've got developed markets slowing." Net profit was up 3.7% in line with forecasts. But Nestle will be aware that its rivals are fairing better. Last month French yoghurt maker Danone reported sales of 6.5% while Dutch-group Unilever saw a 5% rise Both were helped by better-performing cosmetics and baby food markets.