Consumer Giants Are More Like Walmart Than They Think
Nestle, Unilever and other manufacturers are managing to pass higher prices onto their customers. That might not last long.
Reckoning.
Source: Bloomberg
Even as the world braces for recession, the big consumer groups, including Coca-Cola Co., Nestle SA and Unilever Plc, beat expectations and raised their sales guidance this earnings season. It seems many shoppers were prepared to pay more for their products. Yet this optimism flew in the face of an earlier warning about the sector: On Monday, Walmart Inc., a bellwether for the US consumer, issued a profit warning.
So what’s going on? The simple answer is, we must all still buy food, but we can easily jettison non-essentials such as clothing, cushions and even electronics. That’s hurting Walmart and Best Buy Co., which also cut its sales and profit outlook on Thursday.