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Lindt Chairman Admits Pricing Errors Hurt Sales
25 Oct
Summary
- Lindt misjudged consumer response to price increases.
- Cocoa prices reached historic highs, prompting cost hikes.
- Company seeks to lift sales volumes by cutting some prices.
Lindt & Sprüngli's Executive Chairman, Ernst Tanner, revealed that the company miscalculated consumer reactions to price increases. This misjudgment, particularly in Germany, led to products becoming too expensive for some buyers amidst soaring cocoa prices. Tanner stated that the company is not experiencing a crisis, believing its shares are undervalued.
The Swiss chocolate maker is implementing price cuts to improve sales volumes, a strategy expected to be more effective as cocoa prices stabilize. Tanner rejected calls for his resignation, asserting his commitment to guiding Lindt back to success. He noted that while growth targets are being met in the Americas and the Far East, bonuses in the Germany-Switzerland-Austria region will be affected due to missed targets.
