ZURICH : Makers of chocolate bars and coffee to lawn mowers and industrial robots were succeeding in passing on soaring costs to consumers, first-quarter earnings showed on Thursday, allaying fears higher prices could dent demand for their products.
But while cheering investors, with Nestle, ABB and Akzo Nobel enjoying share price gains, the strategy is stirring worries about households' ability to cope and the outlook for the rest of the year. Nescafe owner Nestle was one of the winners on Thursday, reporting a 7.6 per cent rise in organic sales during the first three months of the year as pet food and coffee sales performed strongly despite big price increases.
French peer Danone, whose product line up includes Activia yoghurt and Evian water, said it was also ready for further rounds of price increases"if needed" after reporting a 7.1 per cent sales increase late on Wednesday. Chief Executive Thierry Vanlancker said that the group's"vigorous pricing initiatives" had helped it manage"the unprecedented variable cost inflation that impacted our industry during the quarter".