Cheerios maker is latest victim of trucker shortage

NEW YORK: General Mills Inc suffered the worst plunge since mid-2015 after shipping costs and other expenses squeezed profit margins to their thinnest point in years.

The maker of Cheerios cereal and Progresso soup lowered its full-year profit forecast, citing higher freight and commodity expenses. Operational costs have also risen as the company grapples with an industry-wide grocery price war.

General Mills is the latest company to cite higher shipping costs as a major headwind in 2018, joining Hershey Co, Tyson Foods Inc, Kellogg Co and others. Higher fuel costs and a trucker shortage have driven up expenses across industries. Amazon.com Inc, the e-commerce titan, has been raising prices on some of its suppliers in a bid to protect margins, while Walmart Inc. has said that higher prices to move goods has weighed on margins.

To offset some of the costs, General Mills will look to increase prices on store shelves, but that could be tricky amid fierce grocery competition that has food retailers scrambling to lock in shoppers.

Shares of General Mills fell as much as 10% to US$44.79 in New York yesterday, the biggest intra-day slide since August 2015. The stock had already declined 16% this year through the close on Tuesday.

Shares of other packaged-food companies also fell. — Bloomberg