![]() Hershey in certain cases slims down package size and keeps the price similar - commonly known as "shrinkflation" - to retain customers who say they only have $3 to spend on a bag of chocolate Kisses, rather than $5 or $6, Poole said. ![]() "Value to others might be something 'accessible to me' at an absolute lower price point." "For those who have the money and have the space to store bigger bags, value to them is cheaper price per pound," Poole said. Hershey in recent months has been using its new fulfillment center in Annville, Pennsylvania to more easily and efficiently serve retailers such as mass discounters and dollar stores whose customers are very sensitive to price, Poole said. ![]() But Lindt said the impact of that move on its finances would be small. Some chocolate makers, including majors Lindt (LISN.S) and Nestle (NESN.S), withdrew from or reduced sales in Russia this year to protest the invasion. The Russian invasion of Ukraine has also impacted demand, traders and experts say, with the two countries together accounting for 5% of usual global cocoa demand. read moreĬheaper chocolate has a lower cocoa content, meaning even if chocolate makers' sales volumes stay the same in a downturn, cocoa demand would fall. In Britain, consultants McKinsey found 40% of Britons traded down to cheaper products in both snacks and confectionery in the four to six weeks ended mid-May. store-brand or "private-label" chocolate, a minor part of the overall market that is cheaper than name-brand chocolate, grew by 8% in the last six months. IRI data also showed sales volumes of U.S. That's why you're seeing (a sales) volume decline," said Daniel Sadler, a principal at IRI. Consumers will treat themselves, but it will be smaller sizes, a small treat. "We're going to see chocolate becoming more sensitive to price. ![]() Until the recent dip, "consumers haven't really reduced consumption much at all," she said.Ĭhocolate sales, particularly in the United States, ballooned along with purchases of many consumer products in the later stages of the coronavirus pandemic, with shoppers buoyed by government stimulus payments and sticking with "homebody lifestyle" habits such as buying in bulk.īut chocolate companies are now seeing some consumer behavior change - for instance, shoppers choosing individual candy bars at the register instead of multipacks.Īccording to Chicago-based market researcher IRI, the volume sold of chocolate products in the United States dropped 1.5% versus a year ago in the 13-weeks ended June 12 as prices soared 8.2%. Hershey has previously flagged that it expected a softening in demand. we will see a bit of pull-back in volume," Poole said. "We are expecting that as we move through the year. Hershey's performance closely tracks the rest of the chocolate category. chocolate retail sales volumes have been "off and down" 2% to 3% over the last couple of months as prices have risen in the "high single-digit, low double-digit" range, said Hershey Co (HSY.N) vice president of investor relations Melissa Poole in an interview with Reuters. LONDON/NEW YORK, July 13 (Reuters) - Consumers are cutting back on chocolate due to the cost of living crises in Europe and the United States, according to new data and comments from executives at the world's biggest chocolate companies. ![]()
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