Food and drink giant Nestle has revealed a slowdown in revenue growth after shoppers were deterred by price hikes.
The company behind Nespresso and KitKat also revealed it has eased back on recent pricing inflation after reduced costs in its supply chain.
The Swiss consumer group said on Thursday that it saw organic growth of 7.2% in 2023 compared with the previous year, although this was caused by a 7.5% increase in pricing over the year as volumes declined.
This revenue growth was below the expectations of market analysts.
Nestle said it expects organic growth to be slower for the current year, at around 4%, due to lower levels of price inflation.
However, the company said it will target improvement in profits and growing volumes for the year.
In Europe, the company reported organic sales growth of 8.2% for the year after a 10.6% jump in prices.
Nestle said it benefited from strong demand for Purina PetCare products, including Felix and Gourmet.
It also witnessed “high single-digit growth” in confectionery, with KitKat sales performing strongly.
Mark Schneider, Nestle chief executive officer, said: “Unprecedented inflation over the last two years has increased pressure on many consumers and impacted demand for food and beverage products.
“In this challenging context, we delivered strong organic growth and solid margin improvement with increased marketing and other growth investments. Our free cash flow generation returned to historical levels.
“Looking to 2024, we are prioritising volume and mix-led growth with increased brand support, as we enhance value for consumers through active innovation and renovation, premiumisation, affordability and more nutritious options.”