World’s largest food company warns prices will continue to rise
Nestlé, the world’s largest food company, said earlier this week that it is predicting that the prices of staple items will continue to rise this year.
The big picture: Following more than a year of price increases, consumer giants continue to warn about more hikes to come as households struggle to buy groceries.
What they're saying: "Last year brought many challenges and tough choices for families, communities and businesses," Nestlé CEO Mark Schneider said in a statement. "Inflation surged to unprecedented levels, cost of living pressures intensified, and the effects of geopolitical tensions were felt around the world."
- Price increases, which will vary by market and category, will be "very targeted" and only implemented where "input cost inflation justifies it," Schneider said on a call with reporters Thursday, per CNN.
- "We are still in a situation where we’re repairing our gross margin and, like all the consumers around the world, we’ve been hit by inflation and now we’re trying to repair the damage that has been done," he added.
- Nestlé itself increased prices by 8.2% in 2022, but that still wasn't enough to offset costs, Schneider said.
Between the lines: Facing higher commodity costs and wages, companies are walking a tightrope with pricing strategies, trying to maximize profits without turning away customers, Axios' Nathan Bomey writes.
Zoom out: Although the cost of eggs skyrocketed over the last few months, U.S. consumers got a reprieve from soaring costs in December as the index declined on a monthly basis — the first drop since last summer.
- And, weekly egg prices came down more than 40% early this month from a December peak of about $5.30.