Nestlé has reported its strongest sales growth in 14 years after consumers continue to buy products such as KitKat bars and bottles of Perrier, despite a 7.5% increase in prices.
As the world’s largest consumer goods and FMCG company, Nestlé is the owner of household brands including Nescafé, Cheerios, Nespresso, and Quality Street.
The company reported an organic sales growth of 8.5% to £61 billion in the first nine months of the year, however Nestlé admitted that the revenue boom was mostly the result of passing on significant price rises to consumers.
As the rate of inflation in the UK hit a 40-year high in this week for the second time this year because of soaring food prices, Nestlé’s results are a strong reflection of this trend.
The chief executive of Nestlé, Mark Schneider, said: “We delivered strong organic growth as we continued to adjust prices responsibly to reflect inflation.
“The challenging economic environment is a concern for many people and is impacting their purchasing power. That’s why we aim to keep products affordable and accessible while considering the interests of all our stakeholders.”
Consumer Analyst at leading analytics company GlobalData, Amira Freyer-Elgendy, also offered her view: “Some customers are starting to leave the brand in light of price rises and trade down to more affordable options.
“Despite this minor setback, organic growth has increased since last quarter, reaching 9.3% in Q3, supported by a continued rise in pricing.
“According to GlobalData’s 2022 Q3 consumer survey, 25% of US consumers are more likely to start buying cheaper alternatives in the next 3 months, versus the global average of 22%.
“Higher inflation coming through the supply chain has led to Nestle lifting its full year outlook from 7-8% last quarter to a steady 8%, though we expect volumes to decline further in the coming months as consumers globally cut back.”
