Nestle and Unilever grocery giants report contrasting fortunes in first three months of year 

The consumer product firms had hiked prices during the cost-of-living crisis

Unilever makes a huge range of grocery and confectionery products.

Europe's largest grocery and food giants, Unilever and Nestle have had contrasting fortunes in recent months despite both firms having hiked prices during the cost-of-living crisis, their latest results reveal.

Unilever — which makes a huge range of grocery items including Hellmann's, Domestos, Cif,  Lifebuoy, and Sunsilk soaps, as well as the Magnum and Ben & Jerry's ice creams it is in the process of separating out from the rest of the business — said all five of its divisions helped boost revenues to €15bn in the first three months of the year. 

"Unilever delivered improved volume growth in the first quarter. This was driven by our power brands which saw underlying sales growth of 6.1%, with strong performances from Dove, Knorr, Rexona and Sunsilk," said Hein Schumacher, chief executive of Unilever, in the update. 

Unilever like Nestle and other rivals have increased prices during the inflation crisis over the past two years. In the case of Unilever, the group said its underlying price growth moderated to 2.2% in the latest quarter from the 2.8% in the previous quarter. The London-listed Unilever shares were little changed on Thursday, but have fallen 12% from this time last year. 

Nestle shares, which trade in Zurich fell 3% in the session, and have now fallen by over 21% in the past year after it delivered a downbeat quarterly update. The food giant's total sales fell almost 6% to 22 billion Swiss francs (€22.5bn) in the first three months, despite reporting pricing increases of 3% in the quarter.  

Chief executive Mark Schneider said Nestle had anticipated the "weak start" to the year, but that the outlook hadn't deteriorated. "We expect organic sales growth of around 4% and a moderate increase in the underlying trading operating profit margin. Underlying earnings per share in constant currency is expected to increase between 6% and 10%," Mr Schneider said in its earnings statement. 

Nestle makes a huge number of food brands, including Nescafe, Nespresso, and Pellegrino water. Its confectionery products include Smarties, KitKat and Quality Street, and its pet care items include Purina and Felix. 

While figures from Unilever and European rivals Danone and Reckitt Benckiser suggest that shoppers are starting to move back to big brands, Nestle appears to be an outlier from this trend for now. Sainsbury's, Britain’s second-largest grocer, said on Thursday it too is seeing less evidence of shoppers trading down to cheaper brands. 

Mr Schneider said “significant financial pressures” for lower-income Americans, many of whom have seen a reduction in government-led nutritional assistance programmes, hurt its performance in the first quarter.

 Additional reporting Bloomberg