The maker of Nescafé coffee and KitKat chocolate bars increased prices by 8.2% in 2022, but said this was not enough to offset a rise in its own costs, which had dented its profits.
“We are still in a situation where we’re repairing our gross margin and, like all the consumers around the world, we’ve been hit by inflation and now we’re trying to repair the damage that has been done,” Nestlé CEO Mark Schneider said on a call with reporters Thursday.
Price increases will be “very targeted” and only implemented where “input cost inflation justifies that,” Schneider added, although he declined to say which of the company’s 2,000 brands, which span frozen food, confectionery and baby formula, would be affected.
Unilever, Coca-Cola, brewer Heineken, Colgate-Palmolive and Procter & Gamble, which makes Pampers nappies and Pantene shampoo, have all flagged further increases in the prices of their goods this year, as they grapple with elevated commodity, energy and labor costs.
The costs of raw materials such as energy, dairy products and grains remain high, even though they have receded from their peaks.
Labor and logistics costs have also climbed. That means prices for goods in stores are unlikely to fall any time soon.
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