Kraft Sees First-Quarter Volume Down as Much as 5%

Dow component Kraft Foods said Tuesday that sales volume could fall as much as 5 percent in the current first quarter, due to weak consumer sentiment, retailers keeping less stock, and Kraft pruning less-profitable items from its portfolio.

Speaking at a gathering hosted by the Consumer Analyst Group of New York, the maker of Oreo Cookies, Oscar Mayer hot dogs and scores of other well-known brands said it expects volume to improve significantly in subsequent quarters.

Earlier this month, Kraft cut its 2009 earnings forecast to $1.88 a share, citing the stronger dollar and increased pension costs. It affirmed that view Tuesday.

Shipment volume was hit in the fourth quarter as retailers cut back on inventory, while consumers also have turned to lower-priced private-label products to save money in the recession.

The slowing global economy has also put pressure on consumers in international markets.

Kraft shares were down almost 2 percent at below $25 on the New York Stock Exchange. By comparison, the Standard & Poor's 500 Index was down 3.7 percent.

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