Global food giant Nestle has admitted that it should have reacted faster to competitors’ price cuts to avoid slowing sales.
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Speaking during an interview with the Wall Street Journal, chief executive Paul Bulcke said the group “should have seen the dangers” of losing market share to aggressive pricing by competitors such as Unilever, Danone and Kraft Foods, earlier.
“Sometimes during the year we should have engaged faster to counter these actions… Sometimes we should have had more intensity in our reaction,” Bulcke told the publication.
However, he added that Nestle’s long-term business plan remained unchanged and that “major acceleration” in growth could come from emerging markets, where the group has accelerated its introduction of low-cost products.
The Swiss food giant posted a drop in nine-month revenue last month, hurt by the euro’s decline against the Swiss franc.
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By GlobalDataSales dropped to CHF79.55bn (US$79bn) from CHF81.36bn a year earlier. The company said it plans to buy back CHF7bn of shares this year, up from a previous CHF4bn target.
The group’s organic growth slowed to 3.6% in the third quarter, but Bulcke told the Wall Street Journal that the company was sticking to its long-term growth guidance of 5-6%. He said the company saw higher volume growth in the third quarter than in the previous one, and that the slowdown was partly due to the removal of “under-performing items”.
Bulcke refused to comment on whether Nestle would make a counter bid for confectionery-maker Cadbury.
