Companies and Brands

Food Brands Lose Ground As The Consumer Seeks Value

winter2If consumer spending on inexpensive items is supposed to be a foreshadowing of an improving economy, better days are still a long way off.

Unilever, one of the largest consumer goods companies in the world, said its profit fell 45% to $973 million. The firm said that its results had been materially effected by people buying the least expensive, non-branded food and toiletry products that they can find.

The results of Unilever, Colgate (CL), and P&G (PG) are probably as good a leading economic indication as economists can find. As long as consumers believe that they cannot pay a dollar more for a branded bar of soap or can of soup, they are not likely to be in the market for a car or a refrigerator. Those more expensive items are only going to be purchased when they need to be replaced.

Unilever’s results are a fairly good weather vane. The economy may not be stabilizing as quickly as most analysts think.

Douglas A. McIntyre

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