Inflation bites as consumer prices soar

By Beth Webb

‘Taking a break’ will become more expensive this year, as Nestle warns that its products are set to increase in price as manufacturing rates soar.

The owner of KitKat has already revealed that its prices have lifted by 3.1 per cent; in an interview with the BBC, Nestle CEO Ulf Mark Schneider said that shoppers should expect higher prices across the sector.

“It is a safe assumption that our input cost increases for 2022 will be higher than 2021 – that is something that we have to reflect in our pricing.

“There is almost no place in the company that is exempt from inflation now,” he added. “Some of these things you can hedge against, some not.”

Consumer goods companies have previously warned their consumers about the price rises for their products due to the rising costs of labour, energy and the materials needed.

It will raise pressure on households who are facing a cost of living crisis. Recent data from the Bank of England has revealed that the cost of living could rise by over 7% by spring of this year.

Danni Hewson, a financial analyst at AJ Bell, said to the BBC that big brand owners were facing an “important test given pressures on the cost of living”.

“Consumers may not be able to keep stomaching price increases and so there is a risk they buy less of the popular and more expensive brands and/or trade down to cheaper options,” she added.

“The big brand companies, therefore, face the risk of having to cut their prices just to maintain sales volumes.”