Early Wednesday morning WPP the largest advertising agency in the world started the markets with their earnings.
The agency led by Martin Sorrell reported slowing growth in North American ad spending on consumer staples from larges companies including Procter & Gamble, Nestlé, Unilever and Anheuser-Busch.
“In volume terms these companies are flat or falling,” Sorrell said in an interview. “When volumes fall in packaged-goods companies that’s a big wake-up call: It means you have less consumers and that’s the beginning of serious problems.”
This is the second quarter in a row that WPP has cited slow ad spending in America on staple products, which the consumer is pulling back on.
I have written extensively on the changing habits of the American consumer and this is but another nail in the coffin.
The growing revenue of off-price brands at discount grocery centers like WalMart and Target, the use of credit cards for mid-week purchases and the rash of grocery store chain closings all point to a troubled economy outside the pockets of prosperity in this country.
The fact that this condition has worked its way all the through the supply chain to hit a London advertising conglomerate with offices globally is to say it’s more than a trend. It’s epidemic and I can’t see how the US economy can grow with so many not being able to afford basic necessities.