Nestle profits as shoppers defy rising prices

STORY: The world’s shoppers seem to be defying a cost-of-living crisis.

Results from big food and consumer goods firms show people are still spending on branded and premium products.

Nestle added to the evidence on Thursday (July 28).

The world’s biggest foods group raised its outlook for the year.

It says there is very little evidence of consumers trading down to cheaper products.

Though its first-half profit missed forecasts at about $5.4 billion, that was largely due to taxes and other issues.

Organic sales growth, which strips out factors like currency swings, actually accelerated.

Sales of products like KitKat chocolate bars and Nescafe coffee picked up.

The numbers follow similar outlooks from rivals like Unilever and Danone.

Steep prices increases are helping such firms make up for soaring costs.

However, Nestle Chief Executive Mark Schneider says consumers could eventually start to feel the effects of inflation.

He says it’s easier for the firm to pass on price rises for household goods and cosmetics than for food.

For now that’s taken a bite out of its margins, which Nestle now expect to be at the lower end of its forecasts.

Shares in the firm were down around 1.5% by lunchtime.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting