LONDON (Reuters) – Nestlé reported lower-than-expected sales growth for the first nine months of the year on Thursday as rising product prices discouraged consumers and weighed on volumes.

The group added that it had not seen any impact of weight loss drugs on its sales.

For more than two years, the food industry has carried out significant price increases, citing rising input costs that began with the COVID-19 pandemic and then continued with the invasion of the Ukraine by Russia.

Over nine months, Nestlé’s price increase reached 8.4% but was lower than the average estimate of analysts, which was 8.6%. Real internal growth – a measure of sales volumes – fell 0.6%, in line with expectations.

Investors and analysts have worried that companies are pushing prices too far, amid a cost-of-living crisis that is seeing private labels take market share.

Nestlé’s organic growth, which excludes the impact of currency movements and acquisitions, stood at 7.8% during the first nine months.

Analysts on average expected organic sales growth of 8.1%.

Reported revenue fell 0.4% to 68.8 billion Swiss francs ($76.54 billion).

MEDICATIONS FOR WEIGHT LOSS

A Nestlé spokesperson said the company had “not seen an impact (from weight loss drugs) on its sales”, referring to the potential threat Novo Nordisk’s Wegovy poses to the packaged food industry .

The popularity of this drug has raised concerns in the consumer and distribution industry.

Earlier this month, Nestle suffered on the stock market after Walmart, the world’s largest retailer, said it had seen a slight decline in food consumption among people taking appetite-suppressing drugs such as Wegovy.

Wegovy, which helps patients reduce their weight by around 15%, is currently available in the United States, Norway, Denmark and, since the end of July, in Germany.

(Reporting by Richa Naidu; by Mariana Abreu, edited by Blandine Hénault)

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