Strapped for cash
ZEENAT MOORAD: Is this the time to get out of retail?
Our retailers are in 'Keep calm and carry on' mode. There isn’t a player that hasn’t been affected by the slowdown in household spending — it’s pronounced and ruinous
This year, sales growth at Milo maker Nestlé SA will be the weakest in at least two decades. "Big Manufacturing" — the Unilevers, P&Gs, Krafts and Danones of the world — are in a spot of bother. Revenue growth in major categories is increasingly hard to come by as consumer preferences shift towards more natural products. Also, when people are spending, they’re turning to start-ups and small companies for niche products. The result has been consolidation in the largely fragmented sector. If Kraft Heinz’s failed bid for Anglo-Dutch group Unilever earlier this year proved anything, it was this: even the industry’s largest companies can become prey. We’ve not seen the last of big, fat consumer goods deals. Other than buying "things" to survive, companies are cutting costs and pursuing economies of scale. For Nestlé, whose margins are at the low end of its peer group, the added pressure of an activist investor (one Dan Loeb) has added urgency to its restructuring plans. Greater detail wi...
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