Nestlé warns of further price rises over the year amid rampant inflation
Nestlé has cautioned more price rises could be on the horizon for consumers as cost inflation leaps.
In a three month trading update, the Kit Kat owner said it had already “stepped up pricing in a responsible manner” and seen “sustained consumer demand.”
Nestlé CEO Mark Schneider added: “Cost inflation continues to increase sharply, which will require further pricing and mitigating actions over the course of the year. The Nestlé team addressed these headwinds and advanced our long-term strategy and sustainability objectives with agility and determination.”
In a forecast for the 2022 full year, the consumer brand said it anticipates organic sales growth around five per cent and underlying trading operating profit margin between 17 per cent and 17.5 per cent.
In the first three months of the year, Nestlé saw total reported sales up 5.4 per cent to 22.2 bn in Swiss currency (£17.9bn).
Organic growth was 7.6 per cent in the period with pricing increased to 5.2 per cent.
The company said its organic growth now excludes the Russia region, after “significantly disrupted trading conditions” and a decision from the company to pull back operations to only “focus on providing essential food.”
The firm has suspended sales of brands including KitKat and Nesquik in Russia.
“We are focused on providing essential foods such as baby food and medical/hospital nutrition products. This means we will suspend the vast majority of our pre-war volume in Russia,” a Nestlé spokesperson said earlier this year.
It comes after the world’s largest consumer goods firm faced criticism for not halting sales in the country following its invasion of Ukraine.