Business

Kellogg's cereal sales continue to slump

Boxes of Kellogg's Corn Flakes Image copyright Reuters

Kellogg's has suffered its seventh successive drop in quarterly sales in the third quarter of 2016.

The cereal manufacturer blamed the figures on poor demand for its products in the US and a challenging UK market.

The company also cited "portfolio transformations that have taken longer than anticipated to execute".

However, Kellogg's operating profits were up thanks mainly to lower one-off costs and its earnings per share were up 41% from the same period in 2015.

The company's net income rose to $292m (£239m) in the third quarter, from $205m a year earlier, while net sales fell 2.3% to $3.25bn (£2.7bn).

These figures were boosted by lower one-off costs and higher profit margins and John Bryant, Kellogg Company's chairman and chief executive officer, said: "Our third quarter earnings exceeded our expectations, on the strength of good operating margin expansion and a favourable tax rate."

Changing habits

Dr Dimitrios Tsivrikos, a consumer and business psychologist at University College London, told BBC World TV that sales could be down because people's breakfast habits were changing.

"The younger population will replace cereal with smoothies, fresh fruit and yogurt," he said.

"An older generation will have their cereals during the day as a snack and have a box on their desk in their office.

"A lot of individuals only spend five or six minutes on breakfast and are looking for quicker solutions. They will have something out of a packet for breakfast so nothing needs to be cleaned afterwards."

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