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Nestle raises KitKat prices once more

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Nestle raises KitKat prices once more
29 Jul 2022
min read

News Synopsis

Nestle, the producer of KitKats, has raised its prices once more as a result of "unprecedented" cost hikes. According to the Swiss food juggernaut, prices rose by 6.5 percent in the first half of this year.

Nestle, which also produces Cheerios and Smarties, raised prices by 3.1% in the final quarter of 2021. Price hikes, according to CEO Mark Schneider, were carried out "in a prudent manner." Through strict cost control and operational efficiency, he continued, "we mitigated the impact of unprecedented inflationary pressures and supply chain bottlenecks on our margin development." In comparison to Europe, where price increases were 4.9 percent, North America saw price increases of 9.8 percent.

Nestle reported that organic sales, which do not take into account currency fluctuations or acquisitions, increased by 8.1% in the first half of the year. The company increased its estimate for the year's organic sales growth to between 7 percent and 8 percent. Due to one-time factors, such as increased taxes and write-offs of property and equipment in Russia, net profit decreased by 11.7 percent to 5.2 billion Swiss francs ($5.4 billion; £4.5 billion).

Following the invasion of Ukraine in March, Nestle stopped making investments in the nation and withdrew its well-known brands. There are still some necessities available there, such as baby formula and medicinal nutrition supplies. Fuel and food costs have increased further as a result of the conflict in Ukraine, with UK inflation reaching 9.4% in June, the highest level in more than 40 years.

This week, price increases were also announced by McDonald's and Coca-Cola. Consumer prices in the UK are rising at their quickest rate in forty years, and businesses are now dealing with higher expenses for items like petrol, salaries, and supplies.

With job openings reaching almost all-time highs, some businesses are also having to raise compensation in order to recruit and keep employees. Pay raises, however, do not keep up with the rising cost of living. For the first time in more than 14 years, McDonald's announced on Wednesday that the price of its cheeseburger in the UK would increase from 99p to £1.19.

It followed Coca-Cola, the world's largest beverage company, said that its global pricing had climbed by an average of nearly 5%. Amazon also said earlier this week that it would be raising rates for UK consumers as a result of rising expenses, with the cost of its Prime subscription service going up by £1 per month starting in September.

TWN In-Focus