Nestle sales slip as shoppers are put off by price hikes
The KitKat and Cheerios maker said it increased its pricing by 8.4% for the first nine months of 2023.
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Food and drink giant Nestle has revealed another fall in sales volumes as shoppers were put off by higher prices.
The KitKat and Cheerios maker said it increased its pricing by 8.4% for the first nine months of 2023 amid continued food inflation.
It said the increases helped drive organic growth of 7.8% over the period, but this came as the volume of products bought by customers fell by 0.6% as they pulled back following the price increases.
In the summer, Emmanuel Macron’s French government accused Nestle, and rivals such as Unilever, for refusing to pass lower costs onto families.
On Thursday, Nestle chief executive officer Mark Schneider said: “Growth was driven by pricing as we continued to navigate historic inflation levels.”
Prices rose sharpest in its European business, where shoppers faced an 11.1% hike, leading to a 2.3% fall in volumes.
Nestle said total sales across the company were down 0.4% to 68.8 billion Swiss francs over the nine months to September as it was also significantly impacted by foreign exchange rates.
In Europe, total sales were 1.3% higher as lower volumes were offset by its price increases.
It added that its Purina PetCare business particularly drove growth, amid strong performance from Felix, Gourmet and Purina One.
Nestle said KitKat continued to gain market share as its confectionery arm, which also includes brands such as Smarties and Quality Street, saw high single digit growth, supported by higher pricing.
Strong demand for Nescafe also helped drive “mid single-digit growth” in its coffee business.
Mr Schneider said: “The recovery of our volume and mix is under way.
“We are seeing the benefits of our portfolio optimisation initiatives and increasing marketing investments behind our billionaire brands.
“These steps underpin our confidence that real internal growth – the sum of volume and mix – will turn positive in the second half of the year and again become the main driver of growth going forward.”