The cost-cutting measures initiated by Australians are affecting the bottomline of manufacturers. One of the food producers, Campbell Soup, admitted being hit by the weak consumer environment in Australia.

"We are adjusting our plans and programs as Australian consumers increasingly reflect recessionary mindset, which is impacting a broad range of categories and brands in Australian supermarkets," Campbell Chief Executive and President Denise Morrison told The Sydney Morning Herald.

Ms Morrison said the caution by Aussie consumers and the volume impact of higher prices on retail led to a profit decline for total global baking and snacking division of Campbell.

Besides the soup maker, Heinz also pointed to Australia as a tough retail environment because of the tight competition between Coles and Woolworths which had led the two leading grocers to issue their private labels to the detriment of other branded food products.

Campbell registered in the U.S. for the quarter ended Oct. 30 a profit of $265 million, down from $279 million 12 months ago. The company explains the decline in its gross margin to 39.5 per cent from 41.2 per cent to a rise in costs which were partially offset by higher selling prices and productivity improvements.

The company's soup division logged a 4 per cent decline in sales as volumes went down due to lesser promotions and a delay in soup advertising until the soup season enters high gear.

Campbell's drink division is also suffering from intense competition in the U.S. from companies such as Dr Pepper Snapple Group which introduced its own line of vegetable-juice drinks.

To turn around the slower sales, Campbell hiked advertising spending, particularly for V8, which ate into profits for the firm's drinks division.