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Kraft Q4 sales hit as rivals offered cut price cold cuts and Mac & cheese

By Elaine WATSON , 15-Feb-2013
Last updated on 15-Feb-2013 at 16:52 GMT

Kraft Foods Group expects to post weaker-than-expected fourth-quarter revenues, in part because it lost market share to rivals as competitors engaged in aggressive discounting on cold cuts and mac & cheese, said CEO Tony Vernon.

Kraft, which was spun off last year from Mondelez International, now expects Q4 2012 net revenue to be 10.7% lower than the prior year.

However, it raised its forecast for full-year 2013 earnings to $2.75 per share, up from $2.60.

Speaking to analysts on a conference call this morning, Vernon said one rival's cut price packaged cold cuts had dented sales of Oscar Mayer’s Lunchables as Kraft chose not to respond.

However, when a competitor come out with a lower price version of its Mac & Cheese, Kraft stepped up its advertising and offered bonus packs, he said.

"These are the choices we make as we roll out this playbook. In hindsight, I regret not responding on cold cuts exactly the way we responded on Mac & Cheese.”

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