One is a maker of chocolate that piles on the pounds, the other makes trainers to burn them off.
But both Nestlé and Adidas today admitted that they are being hit by the unwillingness of price-conscious shoppers in Europe to open their wallets.
The stream of good economic news coming from the UK has boosted our consumption: Nestlé said the UK was a “highlight” in its faltering Western Europe division.
But because of consumers cutting back in the rest of Europe, the maker of KitKat, Nescafé, Nesquik, Shredded Wheat and other products — a catalogue which has resulted in its being named the world’s biggest food company — witnessed its slowest first-half revenue growth in four years, and warned: “In Europe consumers are extremely sensitive to price and we have been responsive.”
First-half organic sales growth in Europe was up just 0.5% to Swfr7.5 billion (£5.3 billion), compared with 5% in the Americas and in Asia.
Overall, Nestlé’s underlying sales rose just 4.1% in the first half, missing analysts’ forecasts, and forcing the food conglomerate to lower its full-year target to around 5% sales growth, from between 5% and 6%.
It was a similar story at Adidas: the sportwear giant cut its 2013 forecast because of “lacklustre” sales in Europe. For the second quarter, sales fell 4% to €3.38 billion (£2.9 billion), and operating profit fell 2% to €252 million, compared with expectations for €261 million.
They were led lower by poor sales in western Europe, which fell 11% when the effects of currency movements were stripped out.
Adidas blamed “the ongoing macroeconomic challenges in the region” but added that comparisons were tough as the same period last year benefited from sales of merchandise for Uefa European championships and the London 2012 Olympics.
