Escalating commodity prices have forced food companies to raise prices in the past year.
But an announcement today by General Mills (GIS) calls into question whether food companies will be able to keep passing along price increases to consumers. General Mills said that it has seen weak demand in the U.S., which will hurt its sales volume in the current quarter. The company lowered its 2012 guidance to a range of $2.53 to $2.55, from a rage of $2.59 to $2.61.
The announcement comes on the heels of JM Smucker’s (SJM) statement on Thursday that fourth quarter volumes fell 10%.
The announcements also indicate that American shoppers are still bargain-hunting even with an apparent pickup in the economy and the job market.
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