Nestle has warned that popular products could see a rise in price as it battles steep costs.
The manufacturer of popular products such as KitKat and Shreddies said it has already increased prices by more than 5% over the first three months of 2022 but further hikes could be brought forward in the future. Mark Schneider, chief executive of the Swiss food group, said: "Cost inflation continues to increase sharply, which will require further pricing and mitigating actions over the course of the year."
It comes as the cost of living crisis continues and a series of prices soar right across the UK. However, Nestle saw sustained customer demand despite the jump in prices. The group reported a 7.6% increase in organic sales over the three months to March, driven by a 5.2% increase in pricing and 2.4% rise in volumes.
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It revealed that prices jumped most sharply in North America, which saw an 8.5% increase, while European shoppers witnessed an average 4.1% rise. Mr Schneider said: "In these first months of the year, the war in Ukraine has caused unspeakable human suffering. We remain focused on supporting our colleagues there and providing humanitarian relief, while standing with the international community in the call for peace."
Matt Britzman, equity analyst at Hargreaves Lansdown, added: "Hiking prices to keep things moving in the right direction in the wake of input cost inflation certainly won't be a course of action management want to have to take. But nonetheless it's the position Nestle finds itself in and doesn't look likely to go away any time soon, which adds pressure to the group's volume-led strategy.
"So far, volumes have still been able to move in the right direction aided by the recovery in out-of-home channels that saw demand drop off while restrictions were in place last year."
