LONDON (Reuters) – Nestle reported slightly better-than-expected first-quarter sales on Tuesday, supported by a price increase aimed at offsetting weak sales volumes.

The Swiss food giant, maker of Kit Kat wafers and Nescafé coffee, saw sales rise 5.6% to 23.5 billion Swiss francs (23.97 billion euros), narrowly beating the average estimate of 23.27 billion francs of the consensus provided by the group.

Nestlé raised prices by 9.8% in the first quarter, but sales volumes – what the group calls real internal growth – fell by 0.5%.

“Portfolio optimization efforts and a responsible pricing policy have offset the pressures exerted by two years of cost inflation,” Mark Schneider, CEO of the Swiss group, said in a statement.

On the Zurich Stock Exchange, the Nestlé share rose by more than 1% in the first exchanges.

Consumer goods companies from Unilever to Procter & Gamble (P&G) have raised prices sharply over the past two years to combat rising raw material and supply chain costs, which have reduced margins during the pandemic and worsened further when Russia’s invasion of Ukraine drove energy bills to record highs.

Rising prices have led to lower sales volumes across the industry as consumers, especially in Europe, buy less or switch to cheaper brands.

Unilever, which will report results later this week, said earlier this year that the sector had passed “the peak of inflation, but not yet the peak of prices”.

The American P&G reported last week an increase of 10% in its prices on average and a decline of 3% in its global volumes.

The French Danone will publish its first quarter results on Wednesday before the market.

(Report Richa Naidu; Diana Mandiá, edited by Blandine Hénault)

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