Nestle has been forced to reduce their 2013 target for sales in many of the European markets that have grown weaker as a result of the recession. In many of the European countries that have been hit the hardest the candy maker has actually slashed their prices in order to encourage consumers to continue to indulge in their sweet products.
Although Nestle may be the largest food group in the world, it still missed its forecasts for half-year sales and as a result cut down its overall 2013 Target this week as a result of being forced to reduce prices for its European products. Many different food groups have been struggling with the western European markets attempting to figure out how to boost sales where customers are struggling to survive.
According to Nestle, underlying sales increased by about 4.1% over the first half of the year which was still not enough to reach the projected 4.6% and showed an actual decrease when compared to the first quarter sales projections which sat at 4.3%. The European market is being blamed for the sales being down this year. As a result, the company chose to change its year target to 5% instead of the 5-6% sales growth that it had anticipated on seeing.
A company statement said that they saw their organic growth be muted over the first half of the year since they dropped their prices in certain markets in an effort to have softer costs that would help meet the needs of more budget aware consumers. However, they are still optimistic that the price cuts will lead to a growth in sales volumes over the second portion of the year and increased profits as a result as the change catches up with consumers.