KRAFT might see reduced volume in 1st quarter of 2009

Kraft Foods Executives are expecting that growing private label brands might affect Kraft volume performance in the 1^st quarter of 2009 after the declined performance in the last quarter of 2008. The topic was discussed at the annual confab of the Consumer Analyst Group of New York.

Inspite of volume loss, Kraft made 6% of increase in revenue in the fourth quarter. This increase was made possible due to increased prices which again pulsated by rising commodity costs. Kraft also discontinued some unprofitable products from the market.

Tuesday, Kraft's Chief Financial Officer Tim McLevish told analysts that Kraft also expects first quarter sales volume to fall another 5 percent. "The crisis of confidence that hit consumers in the fourth quarter is still with us."

 

However Kraft expects to improve the volume share after 2^nd quarter.  Analysts believe the sole reason for decline is the susceptive behavior of Kraft towards cheaper and private label brands which are gaining the volume in recession.