Weak economy hits Nestle unit

By Thomas Mulier  |   2008-6-20  |     NEWSPAPER EDITION

NESTLE SA, the world's largest food company, said increase in sales at its Jenny Craig weight-management unit has slowed in recent months as United States consumers cut spending.

"We've had a very, very strong start for 2008, but we are seeing some of the economic dampening in the US," Richard Laube, chief executive of Nestle's Nutrition unit told investors in a presentation on Monday and posted on the company's Website on Wednesday, according to Bloomberg News. "Our growth continues, but not at the 30 to 40 percent rates we had seen in the first few months."

Weight Watchers International Inc and NutriSystem Inc have struggled with a slowdown in US demand. Consumers have curbed spending on nonessential items such as furniture amid the worst housing slump in at least 25 years, rising unemployment and as gasoline hit US$4 a gallon. Nestle bought Jenny Craig in 2006.