KitKat to Dettol: UK consumers warned of further price hikes

Nestlé joins other firms in passing on rising costs, adding to financial squeeze facing UK households

The KitKat-maker Nestlé and the Dettol manufacturer Reckitt have both indicated they will pass on rising costs in the form of higher prices this year, adding to the cost of living crisis facing consumers.

Nestlé, which also makes Nespresso coffee pods, Häagen-Dazs ice-cream and Purina pet food, increased its prices throughout 2021, and by the final three months of the year they were 3.1% higher.

The Swiss food group said it expected its costs to increase further this year and it intended to protect its profit margins by passing some of this extra expense to consumers.

“It is a safe assumption that our input cost increases for 2022 will be higher than 2021, that is something that we have to reflect in our pricing,” said Mark Schneider, its chief executive, on Thursday. “There is almost no place in the company that is exempt of inflation now … Some of these things you can hedge against, some not.”

Nestlé reported 7.5% organic growth for 2021, which was higher than forecast, and included 2% growth arising from price increases.

Meanwhile, the consumer goods company Reckitt, the maker of brands such as Harpic, Nurofen and Strepsils, said on Thursday that its costs increased on average by 11% during 2021. It predicted these would climb even higher this year.

The Berkshire-based firm, which was formerly known as Reckitt Benckiser, said it was absorbing some of its rising costs, but was increasing prices of some of its products.

“We are passing some pricing on to consumers, but we minimise that through programmes that we have internally, such as productivity programmes,” said Jeff Carr, its chief financial officer. “Prices have gone up but we’re absorbing a significant part of that inflation, and we’re not passing it on to consumers. We want to get good offers to our consumers, we want to be competitive.”

Reckitt said it was seeing “across the board” increases in the price of raw materials, especially those related to crude oil such as plastics, as well as tinplate – used for making tin cans – and dairy products.

The two companies are the latest in a long line to announce price rises as the UK struggles with a cost of living crisis. The inflation rate hit 5.5% in January, the highest annual jump in the cost of living in almost 30 years.

Britain’s households are suffering from a squeeze on their earnings, as the price of goods and services – from food to energy bills to TV and broadband contracts – rises.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

According to official figures, more than three-quarters of UK adults (76%) reported that their cost of living had increased over the past month, a rise of seven percentage points from late January.

The Office for National Statistics (ONS) said increasing food shop prices was the most-frequently reported reason for the cost of living crunch (90%), followed by rising energy bills (77%) and increases in the price of fuel (69%).


Joanna Partridge

The GuardianTramp

Related Content

Article image
Bumper profits at KitKat maker Nestlé? They should give consumers a break | Phillip Inman
Workers and consumers are paying for the cost of living crisis, through product price rises and stagnant wages – shareholders, it seems, are not

Phillip Inman

02, Jan, 2023 @12:52 PM

Article image
Double-digit price hikes help Heinz and Reckitt post jump in value sales
Dettol maker says customers willing to accept increases on branded items, and that further rises on the way

Sarah Butler

27, Jul, 2022 @3:48 PM

Article image
Nestlé says more price rises are coming after 5.2% increase
KitKat and Nescafé owner blames surge in cost of ingredients, energy, labour and transport

Sarah Butler

21, Apr, 2022 @11:10 AM

Article image
Nestlé raises prices by 6.5% in first six months of the year
Swiss food and beverage group says sales rose 9.2% driven by price increases, beating expectations

Sarah Butler

28, Jul, 2022 @11:24 AM

Article image
UK single parents skipping meals due to food price inflation, Which? finds
Consumer body says one in three lone parents forced to miss meals or visit food banks to make ends meet

Zoe Wood

24, Nov, 2022 @6:01 AM

Article image
Dettol maker Reckitt Benckiser’s sales slow as it warns over prices
Consumer goods group, which also makes Nurofen and Durex, says its costs are rising

Joanna Partridge

27, Jul, 2021 @4:31 PM

Article image
From milk to crisps: why the price of basic food items is rising
Be it meat, coffee or pasta, the costs of UK grocery staples are going up. We look at the cocktail of cause and effect inflating your bills

Hilary Osborne and Sarah Butler

29, Jan, 2022 @8:01 AM

Article image
‘I see price rises of 25-50%’: how inflation is affecting people with a disability or illness
With the rate at 9.4%, UK households are feeling the pressure of the cost of living crisis

Jedidajah Otte

20, Jul, 2022 @11:22 AM

Article image
Tesco to ration cooking oil purchases as war in Ukraine hits food prices
Store becomes latest supermarket to limit customers as conflict chokes off flow of sunflower oil to UK

Zoe Wood

22, Apr, 2022 @4:43 PM

Article image
Primark owner warns of autumn price rises as costs increase
Associated British Foods says its brands, including Twinings and Ryvita, also feel the inflationary heat

Sarah Butler

26, Apr, 2022 @10:57 AM