Nestlé said on Thursday that shopper ‘concerns around the election’ in the US are putting further pressure on demand in its biggest market by creating consumer uncertainty.
The US presidential election – the most consequential for financial markets in an election-packed year – is under three weeks away.
Currently, Democratic Vice President Kamala Harris and Republican nominee Donald Trump are locked in a close rase ahead of 5 November.
Consumer-led anxiety over the election is an issue for Nestlé and other consumer companies as it threatens to change the buying patterns of Americans ahead of the critical holiday shopping season.
Anna Manz, Nestlé’s chief financial officer, said on a post-earnings call, “We have seen a slowdown in the United States, particularly in pet(care) and some of the concerns around the elections are playing out.”
US consumer sentiment slipped in October amid lingering frustration over high prices, with shoppers already cautious ahead of voting.
Nestlé – the world’s biggest packaged food company and maker of Nescafé coffee and Kit Kat bars – reported that nine-month organic sales in North America fell 0.3% to 18.52 billion Swiss francs.
Petcare is Nestlé’s second-biggest category and its brands, including Purina, are a cornerstone of the company’s wider portfolio.
It has been performing well since the Covid-19 pandemic when more people got pets.
However, uncertainty has made consumers more cautious and caused them to rethink spending behaviour.
For example, they may opt for cheaper pet food instead of premium, branded options, prompting sales decline.
Nestlé also said it is revamping senior leadership and its operating structure, as it cut its full-year sales outlook following weaker-than-expected nine-month underlying sales growth.
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