Nestle sales slow after KitKat and Nescafe maker raises prices around the world

Nestle, the maker of Nescafe and KitKat, has experienced a slowdown in sales after increasing its prices globally.

The food and beverage giant reported robust sales in pet products and coffee during the recent quarter, while frozen food and dairy product sales lagged. It posted total sales of 22.1 billion Swiss francs (£19.35billion) for the first quarter of the year, a decrease of 5.9% from the 23.5 billion Swiss francs (£20.6billion) reported during the same period last year.

Prices were raised by 4.6% year on year in Europe, and 3.4% worldwide. Nestle's Purina PetCare product was the largest contributor to organic sales growth, driven by increased demand for science-based premium brands such as Purina One, Fancy Feast, and Friskies.

Coffee sales saw a slight increase, particularly in Europe, due to Nescafe and Starbucks products, and there was strong demand for KitKats across the continent. However, the company performed poorly in North America, where sales fell nearly 8%, with fierce competition and weaker demand particularly affecting frozen food.

Nestle's frozen food brands include DiGiorno pizza, Stouffer's frozen dinners, and Hot Pockets sandwiches. Temporary supply issues impacting vitamins, minerals, and supplements were also blamed for slowing the growth of its health science division, which includes brands like Peptamen and Optifibre.

The supply issues are anticipated to be sorted by mid-2024, according to the company. Nestle's chief executive Mark Schneider said: "In North America, we have stepped up our innovation intensity and commercial activities, primarily in frozen food, which lost ground in the first quarter.

"Nestle's top priorities remain to execute with excellence, leverage our science and nutrition expertise and drive growth with our billionaire brands. We reiterate our 2024 guidance and look ahead with confidence."