Nestle sales slump on weak North America demand

Swiss food giant Nestle posted slimmer sales for the first quarter yesterday, weighed down by weak consumer demand in North America and a strong Swiss franc.

Total sales fell 5.9% to 22.1 billion francs (RM115 billion) in the first three months of the year at the group, whose brands range from Purina pet food to Nespresso coffee, KitKat chocolate bars and Gerber baby products.

Its organic sales growth – which excludes currency fluctuations and acquisitions – reached 1.4%.

The group’s real internal growth (RIG), which takes into account both sales volume and product value, slumped 2%.

The company said in a statement that sales performance was “impacted by soft consumer demand, particularly in North America, and the temporary supply constraints for vitamins, minerals and supplements”.

Europe and emerging markets “more than offset” the decline in North America, it added.

“A wide range of growth initiatives across the group are now starting to deliver,” Nestle chief executive Mark Schneider said, adding Nestle has “stepped up” commercial activity in North America, primarily in frozen food, which “lost ground” in the first quarter.

Nestle confirmed its annual forecast, aiming for organic growth of around 4%. – AFP