World’s biggest food company warns prices will continue to rise
A cart sits in an aisle at a grocery store on February 15 in Washington, DC. Photo: Stephanie Reynolds / AFP via Getty Images
The world’s biggest food company, Nestle, said earlier this week that it is predicting that prices of core commodities will continue to rise this year.
big picture: After more than a year of price hikes, consumer giants continue to warn of further hikes as households struggle to afford groceries.
What they are saying: “The past year brought many challenges and difficult choices for families, communities and businesses,” Nestle CEO Marc Schneider said in a statement. “Inflation soared to unprecedented levels, cost of living pressures intensified, and the effects of geopolitical tensions were felt around the world.”
The price increase, which will vary by market and category, will be “very targeted” and implemented only where “input cost inflation justifies it,” Schneider told reporters Thursday, according to CNN.
,We’re still in a position where we’re repairing our gross margin and like all consumers around the world, we’ve been hit by inflation and now we’re trying to repair the damage that’s been done “
Schneider said Nestlé itself raised prices by 8.2% in 2022, but that still wasn’t enough to cover the cost.
between the lines: Faced with higher commodity costs and wages, companies are walking a tightrope with pricing strategies, trying to maximize profits without turning away customers, writes Axios’ Nathan Boehme.
zoom out: Although the price of eggs skyrocketed in the past few months, US consumers were relieved from rising costs in December as the index declined on a monthly basis – the first decline since last summer.
And, earlier this month weekly egg prices are down more than 40% from their December peak of around $5.30.
