x
Breaking News
More () »

General Mills vows to expand promotions, price cuts to spur sales

The company is predicting lower profits in early 2025 as it aims to attract customers with better value.

MINNEAPOLIS — General Mills is promising more deals and promotions across several of its brands in the months ahead, as the company works to boost sales and hold onto price-conscious (and inflation-wary) customers.

"It's clear that — from the beginning of the year until now... we've seen more prolonged value-seeking behavior (from consumers) than we anticipated back in June," said General Mills CEO, Jeff Harmening, in a call with investors on Wednesday.

The company is now lowering its profit outlook for the rest of the fiscal year, expecting operating profits to fall 2% to 4%, as it expands short-term price cuts and promotions on items like Totino's Pizza Rolls, fruit snacks and refrigerated baked goods.

"They've always done promotions, so I think what this means is that they're gonna do promotions a little bit more broadly, but they're still not prepared to actually uh drop the top line prices," said professor George John, who is the General Mills-Gerot Chair in Marketing at the University of Minnesota Carlson School of Management. "I may hold the General Mills Chair in marketing but I've never had any pressure from them to support them." 

John says he's not sure the efforts announced by General Mills will be enough to combat a larger trend he's seen play out for more than a decade.

"Our habits have changed," John said. "That's number one. Yes, this is a tactical move it'll make some difference, but it's not gonna solve the fundamental problem of the loss of prominence of breakfast cereal."

Despite General Mills owning 45 different brands that cover everything from dog food to Dunkaroos, John says cereal is still central to the success or failure of the company and if you combine the general public's changing views on taste and nutrition, with economic shifts like inflation and how we shop, he has deeper concerns.

George John: "I look at one thing in all these annual reports sales because everything else is subject to my competent brothers and sisters in accounting. Sales you can't fiddle too much and sales have been just beating inflation, which means in real terms it's stagnant. In organic volume, which means number of physical units shipped, it's been going down. So that's the basic picture. Which is not a pretty picture. "

Kent Erdahl: "Having said that, General Mills isn't just a company behind the labels in the grocery store, it's a major employer in our area. We've seen several of our big corporations cutting back recently (some announcing layoffs). Are you concerned about that?" 

George: "Oh, terribly. I see this every semester. My students I teach are looking for internships and jobs. The anecdotal picture on jobs in our area is a lot grimmer than the the statistics show. I just see it in the faces of my students looking.

It's tough and it's toughest on people trying to enter the labor force. There are a bunch of different reasons for that, but when you slow down the growth, that's what happens. You don't need to hire, you're mostly trying to do efficiency cuts and things like that.  That's not just General Mills. I'd say - generally speaking - our metro areas sort of, um, been caught in that rut."

Before You Leave, Check This Out