Nestle has warned about KitKat prices
21 April 2022
The Swiss food giant Nestle has issued a warning that it would be forced to raise the prices of its products due to the increasing costs of food.
The company that makes KitKats and Nesquik cereal increased their pricing by more than 5 percent over the first three months of the year.
As a direct result of the price rise, Nestle’s sales were up by 7.6% during the entirety of the period.
The chief executive officer of Nestle, Mark Schneider, issued a warning that “further pricing and mitigation initiatives throughout the course of the year” will be required in the event that expenses increase.
Mr. Schneider stated, “We increased KitKat prices in a reasonable manner, and observed continuous demand from customers.”
According to the United Nations Food Price Index, the current level of global food costs is the highest it has been since records began being kept sixty years ago.
Warnings about prices have been sent by the manufacturers of KitKat and Durex.
For the first time in the last three decades, KitKat prices are climbing at an alarmingly rapid rate.
As a result of growing prices for power, gasoline, and food, the cost of living in the United Kingdom is increasing at a rate that is the fastest it has increased in the last 30 years. This is putting a pressure on household budgets.
Analysts believe that the price hike of 5.2 percent that Nestle implemented helped the company achieve faster-than-expected growth in revenue.
According to Matt Britzman, an analyst at Hargreaves Lansdown, “in the wake of input cost inflation, boosting prices to keep things going in the right direction will certainly not be a course of action management wishes to follow.”
“However, it is the scenario Nestle finds itself in, and it does not appear to be going away any time soon,” he continued. “It is the situation Nestle finds itself in.”
The previous month, Nestle made the announcement that it will limit its product offerings in Russia to the essentials, such as infant formula and medical nutrition products. KitKat and Nesquik sales were halted, and investment in the country was canceled as a result of the growing number of western companies who pulled out of their activities in Russia as a form of protest against the war.
