In an increasingly competitive retail environment, sales increases are more and more driven by increases in sales volume rather than by price increases. That’s the takeaway from Q4 2018 results announcements from Nestle, Procter & Gamble and Unilever, according to Reuters.
Nestle’s sales grew 2.8 per cent, but higher prices contributed only a 0.2 per cent boost. At Unilever, price rises accounted for a paltry 0.1 per cent contribution to overall sales growth of 3.4 per cent. At P&G organic sales rose 1 per cent with lower prices offsetting a 2 per cent increase in volume of goods moved.
As customers move to newer brands and products, large retailers are being forced to hold the line on prices, while they face competition from Amazon.com and drugstores. Freight costs are also on the rise as railroads and trucking firms face driver shortages, increased fuel costs and reduced capacity.
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