Nestlé, the world’s largest food and beverage company, announced it would hike prices in response to inflation.
As of June, inflation in the United States reached a year-over-year rate of 5.4%. Businesses and consumers are therefore seeking to retain their margins in the face of the diminishing purchasing power offered by the dollar.
As Nestlé CEO Mark Schneider explained to journalists on Thursday: “What we’ve seen this year is some kind of a turning point, where after several years of low inflation, all of a sudden it accelerated very strongly.”
CNN Business reports:
Schneider said he believes that inflation is transitory. But the owner of brands including Nescafe, Gerber and Cheerios said it would need to raise prices by roughly 2% to offset cost increases of 4%. Nestlé hiked prices by 1.3% in the first half of 2021.
The company can hedge against some cost increases, such as rising coffee prices, said Schneider. But it can’t avoid the rising cost of things like transportation, which puts pressure on the company’s margins.
Nestlé is not the only company to raise prices. CNN Business adds that General Electric, Unilever, and other large firms in a variety of industries are seeking to hedge against an increasingly salient inflation risk. – READ MORE