A survey published on Friday said US consumer confidence had tumbled to lower levels since last August

A survey published on Friday said US consumer confidence had tumbled to lower levels since last August


"We are in a very competitive environment," General Mills CFO Don Mulligan warned just over two weeks ago as the US food giant issued its annual results.

General Mills "tactical" promotions meant the Cheerios and Yoplait maker posted flat margins for the three months to the end of May and, although Mulligan insisted the company had "tremendous momentum", concerns that the fierce competition in the US food sector would continue to affect the business' profits hit its shares.

This week, a batch of the largest food makers will kick off a period of announcements of second-quarter results, shining a light on the state of play in the food sector. To what extent are consumers still motivated by price? What level of promotions are needed to maintain market share? Who is paying for the promotions - manufacturers or retailers? And, amid signs of rising commodity costs, will brand owners be able to raise prices with consumer confidence still fragile?

On Friday (16 July), a survey released by Reuters and the University of Michigan showed that US consumer confidence had tumbled in early July to the lowest level since last August.

PepsiCo and Hershey are two of the biggest US companies set to report and investors will be watching closely for signs of how these companies, two of the biggest brand owners in our sector, are dealing with retail customers facing consumers still searching for value.

Smaller stocks will also be under the microscope. In May, US snack maker Lance slashed its profit target after promotions weighed on revenue growth. A month later, Lance announced plans to cut jobs to reduce costs and improve margins. On Thursday, Lance will report its second-quarter numbers and analysts will be looking for signs of optimism at a company that has had a challenging few months.

In Europe, Norwegian conglomerate Orkla, which has food operations across Scandinavia, central and Eastern Europe and Russia and as far afield as India, announces its second-quarter figures on Wednesday. In May, Orkla said it expected its FMCG business "to continue to deliver a robust performance" after first-quarter profits jumped by almost 20%.

Since then, Orkla has announced ambitious plans for expansion in India but also reported that its group president and CEO will step down later this year. Any change at the top could lead to some disruption and investors will be waiting for signs that the company can carry out an orderly transition.

Those hoping for orderly progress on Uniq's plans to restructure its pension scheme this morning faced some frustrating news. The UK convenience food group, which supplies retailers like Marks and Spencer and The Co-operative Group, said its plans to pay off its pension deficit had been rejected by the UK pensions regulator.

The decision is another blow to a company that has endured a tumultuous couple of years, during which the business has sold its operations in Europe in a bid to focus on the UK. The group, which in April had a pension deficit standing at over GBP430m (US$657.5m), now has to restart talks with its pension trustees.

Uniq said today that the outcome of those talks will have a "fundamental impact on shareholder value". This morning, Uniq's shares tumbled by more than 29%. On Thursday, Uniq will give the market a trading update and, despite sales continuing to grow, the company's pension problems will cast a shadow over the company.