Sept 18 Reuters General Mills posted a smallerthanexpected drop in quarterly sales on Wednesday, benefiting from improved demand as the Cheerios maker cut prices for some of its products.

General Mills and other packaged food peers have been grappling with lower volumes for the past few years as priceconscious customers balk at companies raising prices to tackle higher input costs.

As a result, General Mills has been trying to pare back prices in the past two quarters to boost volumes. Volumes were flat in the reported quarter, compared to a 2 percentage point decline in the prior one.

Prices were down 1 percentage point in the first quarter, compared with a 6percentagepoint rise a year ago.

Consumers choosing homecooked meals to economize contributed to a 1 percent pound volume growth in U.S. retail categories in the quarter, CEO Jeff Harmening said.

The company expects volume trends to improve gradually in fiscal 2025, although fullyear category dollar growth is expected to be below its longterm growth projections.

However, General Mills39; gross margins fell 130 basis points to 34.8 partly due to higher input costs and doubledigit media investments.

Last week, General Mills said it would sell its North American yogurt business to French dairy firms Groupe Lactalis and Sodiaal in a 2.1billion deal to focus on its core brands in a bid to lure valueseeking consumers.

Its quarterly sales fell 1 to 4.85 billion from a year ago. Analysts, on average, expected a drop…