Global Consumer Product Companies Outlook: Cautious Optimism in the Still-Uncertain Consumer Landscape in 2025

For 2025, we maintained our outlook for consumer staple product companies as stable and revised our outlook for consumer discretionary product companies to stable from negative.

Key Highlights:
-- At least some pressure on consumer purchasing power and therefore behaviour will persist well into 2025, which could have a more pronounced effect on the operating performance of consumer discretionary product companies.
-- We do not expect to take any credit rating actions solely because of broader sector trends over the next 12 months.
-- Credit rating actions will largely be driven by the evolution of the credit risk profiles of individual consumer product companies within our portfolio.

"While some pressure on consumer purchasing power will persist in 2025 because of still elevated, albeit declining interest rates, and the compounding effects of inflation, we generally expect a gradual recovery in the operating performance of consumer discretionary product companies by H2 2025 on the back of lower interest rates," said Aarti Magan, Vice President of Corporate Ratings - Diversified Industries at Morningstar DBRS. "Consumer staple product companies, on the other hand, are expected to fare better than their discretionary counterparts given the relatively inelastic demand for consumer staple products."