(Reuters) -Cheerios cereal maker General Mills forecast annual profit below estimates on Wednesday and posted a bigger-than-expected drop in quarterly sales hurt by lower demand for its snack bars and pet food, as well as higher input costs.

The company also expects annual dollar value growth in its businesses to be below its long-term projections, pushing its shares down by about 5% before the bell.

The Minneapolis, Minnesota-based company has struggled with lower volumes and retailers cutting down on inventory, while facing ongoing competition from lower-priced private labels that have been eating into its market share.

Net sales at General Mills’ North America retail segment, the company’s biggest revenue contributor, fell 7% in the quarter ended May 26 due to a 6 percentage point drop in volumes. Overall, its volumes fell about 2 percentage points in the quarter.

“Value-oriented consumers have learned that trading down to lower-priced private labels doesn’t mean sacrificing quality,” said Zak Stambor, an analyst with eMarketer, adding that this is a growing concern for companies like General Mills.

Peers WK Kellogg and Kraft Heinz have also reported pressured volumes, while competitor Campbell Soup reported an upbeat quarter and raised its forecast owing to demand recovery and improvement in volumes.

The company has also been pressured by higher input costs, such as sugar and labor, as well as supply chain disruptions.

General Mills expects full-year adjusted profit to be between down 1% and up 1%, compared with analysts’ estimates of a 3.7% rise, according to LSEG data.

“We expect ongoing macroeconomic uncertainty to result in continued value-seeking behaviors by consumers, affecting both the products they buy and the channels they shop,” CEO Jeff Harmening said.

The company reported quarterly net sales of $4.71 billion compared with analysts’ estimates of $4.85 billion.

On an adjusted basis, the company earned $1.01 per share, edging past estimates of 99 cents.

(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Tasim Zahid)