Chairman & Chief Executive Officer at General Mills
Yes. Sure, Andrew. Thanks for the question. I would say, ironically, in the second quarter, a lot of what occurred in we anticipated, including retail sales and the fact that we were capacity constrained. And as we look ahead, we guided to double-digit growth for the second half of the year, by which I mean starting in Q3, given the strong level of innovation we have and the fact capacity is online, and we've got really good advertising and marketing support.
The one thing that was different than we expected was a drawdown in retail inventory you pointed out to. But we don't -- first of all, most importantly, we don't think that this is a long-term trend. We think it is something to happen this quarter. In terms of the rationale why, I would say, in general, the retailers have carried a little bit less inventory across the board during this time only because with inflation, what you don't want to do is carry a lot of working capital. And so -- but certainly not eight points worth of differential.
The other reason I would say is that because we lack capacity, there are a lot of categories like treats, for example, where normally we would merchandise a lot during this time of year, but we couldn't do that. And so not only do we not -- were we not able to service demand, but we had to pull back on merchandising. And a lot of times, retailers carry more inventory when they're going to merchandise. And so you really see that in our treats business.
And then the third reason is we had a couple of big retail customers and we have a more mass merch orientation that didn't take inventory coming into the season because that warehouses full of other things. It's a little bit different customer set than our North America Retail business, for example. And so that's why we don't see it on the North America retail side. So, those are really the laundry list, if you will, of reasons why inventory was less. But as you can imagine, we've done a very deep dive on inventory levels by customers. And I can tell you, we don't think there's going to be a repeat performance of that nature in the third quarter. In fact, that's why we're comfortable guiding up double-digit sales growth again.