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Nestle announces an increase in the prices of its products

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Nestle, the world’s largest food producer, has announced price hikes for its products in 2023, CNN reported. This is another company, after Coca-Cola, Unilever, Procter & Gamble or Heineken, which decides to take such a step due to the growing costs of doing business.

Nestle announced on Thursday that there will be further increases in the prices of basic food products in 2023. The company made this step last year, but in their opinion, an increase of 8.2 percent. was too small to offset the effect of rising costs.

“We’re still in a situation where we’re improving our gross margin and, like all consumers around the world, it’s caught up with us.” inflation. Now we are trying to make up for the losses incurred – said Mark Schneider, CEO of Nestle, during a meeting with reporters.

According to CNN, the increases are to be “very targeted” and made in those cases where “cost inflation justifies them”. At the same time, he refused to clearly indicate which product categories or brands he was referring to.

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Price increases can discourage consumers

Nestle is another food and household goods company that has announced a price increase. Previously, it was announced Coca-Cola, Unilever, Procter & Gamble, Heineken and Colgate-Palmolive, arguing that they are facing increasing energy pricesbasic raw materials and labor costs.

“We’ve probably passed peak inflation, but we haven’t hit peak prices yet,” Graeme Pitkethly, Unilever’s chief financial officer, told reporters last week. Of course, when companies raise prices, they must face the risk that customers will abandon their products. The aforementioned Unilever reported that in 2022 the sales volume decreased by 2.1 percent. Heineken also expects sales to fall in Europe after raising prices due to rising energy costs.

Retail chains benefit from price increases

Price increases among well-known brands can be an opportunity to increase profits by retail chains. The popularity of private labels is growing. Thanks to this, American Walmart recorded an increase in sales by 8.2 percent. in the last quarter of 2022.

On Tuesday, Carrefour CEO Alexandre Bompard announced that in the face of changes in the market and the desire to “protect the purchasing power of customers”, the company plans to significantly increase the share of private labels – to 40 percent. sales in three years. He also noted that the trend of consumers moving towards private labels accelerated in 2022 in all markets where the chain is present. among others In SpainItaly BrazilArgentina and on Taiwan.

In Poland, according to the NielsenIQ survey, this category has grown by 10% over the last year. (data for June 2022), and these products are already responsible for 21 percent. sale of basic foodstuffs and chemicals.

Main photo source: Shutterstock

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