Beer and coffee sales in China have plummeted by over 10 percent as consumers continue to tighten their belts amid a general downturn in consumption of Western goods.
Economic growth has struggled to recover post-Covid, with China facing numerous problems.
GDP grew by just 4.6 percent in the third quarter, failing to hit Beijing’s five percent target.
Beijing has been struggling with a property crisis, deflation and high levels of unemployment among young people.
The sluggish economy has hit the confidence of Chinese consumers, who have started to rein in their spending, particularly on Western goods.
Sales of luxury Western brands have slumped, hitting the bottom lines of companies such as LVMH, Richemont, and Burberry.
However, Chinese consumers are also now turning their backs on a larger selection of staple Western consumer goods, from beer to coffee and even burgers.
The world’s largest beer producer, AB InBev, reported last week a substantial drop in revenues.
The company, which produces Budweiser, said sales had plummeted by 16 percent in the third quarter of the year.
Carlsberg, another major beer producer, also saw a drop of six percent in its sales for the same period.
The slump in sales is not confined to alcoholic beverages, with both Starbucks and McDonald’s also reporting lower than expected sales for 2024.
Starbucks saw comparable store sales fall 14 percent, while the beef burger giant also reported negative sales in China.
The decline in sales has also spread beyond the food and hospitality sector, affecting beauty and fashion products.
Beauty brands like Estée Lauder and L’Oréal have reported worse-than-expected results in the region.
Sales for the former decreased 11 percent in the most recent quarter, driven by mainland China, where the company noted a declining appetite for skincare.
It doesn’t expect that recent government stimulus will help sales in the current quarter.
