By Richa Naidu
LONDON (Reuters) – Nestle on Thursday said shopper “concerns around the election” in the United States are putting further pressure on demand in its biggest market by creating consumer uncertainty.
The U.S. presidential election, the most consequential vote for financial markets in an election-packed year, is weeks away and Democratic Vice President Kamala Harris and Republican Donald Trump are locked in a close race to win on Nov. 5.
Consumer-led anxiety over the election is an issue for Nestle and other consumer companies because it threatens to change Americans’ buying patterns ahead of the critical holiday shopping season.
“We have seen a slowdown in the United States, particularly in pet(care) and some of the concerns around the elections are playing out,” Nestle CFO Anna Manz said on a post-earnings call.
U.S. consumer sentiment slipped in October amid lingering frustration over high prices, with shoppers already cautious ahead of the poll.
Nestle, the world’s biggest packaged food company and maker of Nescafe coffee and Kit-Kat wafer bars, reported nine-month organic sales in North America fell 0.3% to 18.52 billion Swiss francs ($21.42 billion).
Petcare is Nestle’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.
But the uncertainty is making consumers more cautious and causing them to rethink their spending behavior. For instance, they may buy cheaper pet food instead of the premium options, prompting declining sales.
Nestle 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.
($1 = 0.8646 Swiss francs)
(Reporting by Richa Naidu; Editing by Sharon Singleton)