Excerpt from Reuters.com
Price hikes boost profits at global consumer giants; will spending last?
By Doyinsola Oladipo - April 25, 2023
Quoted: Matthew C. McAleer
NEW YORK, April 25 (Reuters) - Major global brands like McDonald's, General Motors and Nestle posted steady first-quarter results built on higher prices, demonstrating that shoppers across major economies are still spending despite slowed economic activity.
Price increases for soda, appliances and other goods bolstered profits, but sales volumes declined for many bellwethers in Europe and the United States. Investors and executives are concerned consumers are starting to balk at increased costs as the economic outlook dims.
"There is uncertainty on how the consumer environment may ultimately play out in 2023,” Coca-Cola Chief Executive James Quincey said on a call with investors.
U.S. consumer confidence fell to a nine-month low in April, the Conference Board said. Global shipping leader United Parcel Service (UPS.N) forecast full-year revenue at the lower end of estimates.
Nestle SA CEO Mark Schneider said "the European consumer has fared better than expected." Switzerland-based Nestle (NESN.S) increased prices by nearly 10% during the quarter even as sales volumes fell 0.5%.
The Conference Board reported a grimmer U.S. consumer outlook, with short-term expectations down and reduced plans for big purchases.
"Leading indicators are showing weakness," said Matt McAleer, director of equity strategies at Cumberland Advisors. "But it calls into view whether we'll see a harsh recessionary environment if employment stays as strong as it has."
Read the full article at Reuters: https://www.reuters.com/markets/what-recession-global-consumer-giants-boosted-by-spending-higher-prices-2023-04-25/
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