Lower prices, more promotional activities
The trading update the Dutch coffee
and tea company published did not look very positive: “The segment Retail –
Rest of World sustained the good performance of the preceding quarter” (+6.8%
on a comparable basis), but in Western Europe, Douwe Egberts fared less well: sales
there were 8.5% lower on a comparable basis.
That is among other a consequence of
“the earlier announced management changes in the five key countries, lower
volumes in France due to tough trade negotiations and by aggressive promotional
activities by private labels in most Western European countries.”
Because of the bad results in
January and February, management has decided to drop prices and to increase
promotional activities “to re-establish its competitive position, which has
resulted in a significant rebound in volumes and sales performance from March
onwards.” This made the market share for coffee rise in the Netherlands,
Denmark and Germany, but it remained stable in France and in Spain and Belgium
market shares dropped.
The Dutch company,
which will soon be taken over by German investment company Joh. A. Benckiser
(JAB), expects “to grow its segment sales by 0 to +2%. The outlook reflects
continued price and volume pressure in Western Europe. The company is therefore
rebalancing pricing and volumes to re-establish its competitive position, which
affects sales.”
