Coca-Cola CEO says economic impact of coronavirus is just beginning

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Coca-Cola CEO James Quincey on Wednesday presented gloomy forecasts for the recovery of the global economy after the impact of the coronavirus pandemic.

“The economic impact of the lockout is just beginning,” said Quincey on CNBC’s “Squawk Box”.

More than 36 million Americans in the U.S. have applied for unemployment advantages since the coronavirus has upset the economy. The Congressional Budget Office said on Tuesday it expects US GDP to fall 38% on an annualized basis in the second quarter. The International Monetary Fund predicts that the world economy will decline by 3% this year.

Quincey said he expects a “U” or “extended U” shape recovery rather than a “V” shape, where the economy will quickly return to pre-crisis activity.

Although it said it was too early for Coca-Cola to assess how consumer spending patterns are changing as locks are released, the company expects consumers to be more short of d ‘silver.

“We will have to recognize that after this viral crisis, the economic impact and the hangover of the lock will be restrained, and the consumer will focus much more on affordability or lower prices,” he said. to Andrew Ross of CNBC. Sorkin.

Coke still sees negative world volumes in May, although it improved slightly after falling 25% in April, according to Quincey. About half of the company’s revenue comes from out-of-home chains, such as restaurants, cinemas and stadiums. In China, which began easing home stay orders in April, demand in May has not returned to pre-crisis levels.

Coke shares rose 1% in pre-market trading. The stock, which has a market value of $ 191 billion, has dropped 19% so far in 2020.

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