A more simple solution: Nesle now opens half an hour earlier every day in order to try to solve recent problems
“A more worrying trend”Such innovations are ostensibly intended to entice European and American shoppers to spend more. But they also acknowledge a more worrying trend: that emerging market consumers, those supposed
saviours of the industry, are also showing signs of flagging.
Companies have spent decades building emerging markets operations, the better to tap the
mushrooming middle classes. China, for example, has been bombarded with western products. But there are signs of a deceleration in rapid demand growth. For example, companies that have registered rapid growth in China are starting to decelerate. The McDonald's fast-food restaurant chain and Mead Johnson Nutrition, the US maker of Enfamil baby formula, in July signalled slower sales growth in China.
"In China, consumers are reacting with greater caution as the economy has slowed," McDonald's chief executive Don Thompson told analysts in July. "We have seen this particularly in our tier-one cities where we are more heavily concentrated."
At Ting Yi, the Taiwanese food and drink manufacturer that dominates China's instant noodle market, drinks turnover fell by more than one-fifth year-on-year in the first quarter. It blamed the results on China's "fast-changing and unstable environment".
This is at odds with the mantra of many multinationals, which say China's second-quarter
gross domestic product growth of 7.6 per cent - its slowest since early 2009 - is nothing to fret about. But it
dovetails with concern about the return of rising food prices, attributed to environmental factors such as this year's US droughts and a weak Indian monsoon. That cuts deeper in countries such as China, where food takes a far bigger slice of household budgets than in mature economies.
This is something struggling South African consumers are all too familiar with, says Gareth Ackerman, chairman of the Pick n Pay supermarket chain. "Across the whole of southern Africa, there are steep rises in prices for fuel and electricity, along with inflation and volatile exchange rates, which is eating into people's disposable income."
Unemployment in the region, he adds, is any where between 20 and 40 per cent. Those who do have a job generally have to support seven to 10 relatives on what is a often rather meagre wage. That translates into an equally meagre dinner, he says: processed sausages, frozen chicken pieces pumped up with brine, or thinly sliced sausage in a sauce made from maize and tomatoes. "That's the market we are trading to," he shrugs.
Some 5,000 miles from Johannesburg lies Istanbul. This is a city that displays all the signs of a consumer boom - traffic jams in clubland at 2am, economic growth of 8.5 per cent last year and a retail market that has doubled in the past decade. But it is also home to BIM, a discount store selling bottled water for half the price of a French rival active in Turkey, where consumers are among the world's more pessimistic. "In terms of trading down, Turkey is much closer to the US and Europe than the Bric countries [Brazil, Russia, India and China], where
frugality comes later because when you have money you spend, spend, spend," says Deran Taskiran, head of consumer coverage for Boston Consulting Group in Istanbul.
Whether or not Turkish thrift will prove the country's saving grace remains to be seen. Debt has caused American and European households to rein in spending - but at the same time a propensity for saving has skewed China's economy towards exports. Regardless, both routes add up to tightened purse strings - and companies are not counting on them loosening any time soon. "Particularly in Europe, consumers are poorer than they used to be, and feel entitled to be - and they are going to be that way for a while," says Unilever's Mr Sigismondi. "The pressure on my shoulders is not insignificant."