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Nestle reports ‘worst sales growth’ in five years

Nestle reports ‘worst sales growth’ in five years

Leading global food firm Nestle experienced its slowest first-quarter worldwide sales growth since 2009 during the first quarter of 2014, according to a new report.

Figures from the company show that sales did grow during the first three months of the year, but only by 4.2 per cent. Of this, 2.6 per cent was put down to internal growth, while price increases accounted for 1.6 per cent.

Nestle has recently experienced a significant decline with regard to its net revenue too, as it has fallen by 5.1 per cent to $23.6 billion (£14.1 billion).

Paul Bulcke, chief executive officer of Nestle, said in a statement: "Our organic growth in the first months of the year was in line with expectations and driven by volume rather than price."

It is thought the food firm may not have performed as well as in previous first quarters due to the late date of Easter this year, while poor weather conditions in northern parts of the US, increased frugality in Europe and the current strength of the Swiss Franc may have all contributed as well.

However, Nestle - which has around 8,000 brands in its impressively extensive portfolio - remains positive about the future and is confident that sales will pick up as the year continues.

Mr Bulcke said: "The continued rollout of new products along with good execution sustained this growth in difficult market conditions. We will keep up the pace of innovation, while further strengthening support for our brands."

He added that the company has already confidently predicted its sales forecast for the remainder of the year, with the final six months expected to be more successful than the first half. 

Nestle believes it will outperform the rest of the market during this period, growing organically by around five per cent.

Despite the slow growth, customers seem to remain satisfied with Nestle's offerings, as shares in the business have increased by 2.5 per cent already this year.

In addition to this, the company's coffee brand Nespresso performed well during the first quarter, even though competition from rival brands has increased.

 

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