Nestle CEO warns customers that inflation is not going anywhere
Nestle raised prices by over 9% during the third quarter due to costs of raw material
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The chief executive officer for Nestle, Mark Schneider, predicted inflation will continue to be a problem for consumers as the economy moves into 2023.
"This is a situation no one wished for," Schneider told Bloomberg. "We are seeing huge upward pressure on energy, some of the agricultural commodities and also transportation costs."
Nestle, the largest food manufacturer in the world, raised prices by 9.5% in the third quarter as sales slowed by 0.2%. Inflation has risen due to a higher cost of raw materials and transportation.
Schneider noted that the ongoing energy crisis in Europe would hurt demand for the company's products as consumers will likely switch to cheaper alternatives. Moreover, employee wages will increase prices, according to Schneider, as the company prepares to negotiate salaries in the first quarter.
INFLATION SURGED MORE THAN EXPECTED IN SEPTEMBER AS PRICES REMAIN STUBBORNLY HIGH
The CEO of Nestle indicated that a rise in cost for raw material will result in continued inflation going into 2023. (iStock / iStock)
Nestle estimates their full-year revenue growth will reach about 8%, and the group is entering its second consecutive annual decline. The Swiss manufacturer produces a variety of products, including food and coffee pods.
During the month of September, the Labor Department noted that everyday costs of living for items such as gasoline and groceries rose by 0.4%, with prices reaching an annual rate of 8.2%
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Recently, Nestle had to issue a recall for their ready-to-bake refrigerated Toll House Stuffed Chocolate Chip Cookie dough products due to concerns that white plastic pieces may have contaminated it.
No consumer has reported any illness or injury at this time.
"We are working with the U.S. Food & Drug Administration (FDA) on this voluntary recall and will cooperate with them fully," Nestle said in a statement.