Nestlé, the world’s biggest food company, has been losing share in the US, its biggest market, according to a study of Nielsen market data by Bernstein Research. The maker of Kit Kats and Nescafé coffee has lost share in almost every period over the past three years, with the shrinkage reaching 75 basis points in the first half of this year.
Flagging performance in the US comes on the heels of a profit warning at Danone, Nestlé’s smaller rival, largely owing to deterioration in Spain. According to some analysts, it raises questions over whether the Swiss-based food group – renowned for consistently outperforming its peers – may miss its own targets for sales growth.
Bernstein Research believes that Nestlé continued to increase sales in the US last year (by 2 per cent) and in the first quarter of this year, but that that could reverse into drops of between 1 per cent and 2 per cent in the next three quarters. That would drag down “Nestlé growth to the bottom end of [or even below] the Nestlé model of 5 to 6 per cent”, wrote Bernstein analyst Andrew Wood. – (Copyright The Financial Times Limited 2012)
