Nestlé beats forecasts but feels UK squeeze

Kit Kat maker Nestlé today said it had put up prices enough to ensure it will still rake in its expected profit this year despite soaring costs - but admitted squeezed British shoppers are holding back.

"Growth in Britain suffered the impact of Easter falling later this year than last and by consumers' reduced levels of disposable income," said the world's largest food group.

Still, shoppers elsewhere agreeing to pay more for Nestlé's instant coffee, Nescafé, and other staples meant first-quarter sales - stripping out the effect of exchange rates and acquisitions - were up 6.4% to Swfr 20.3 billion (£13.9 billion).

Nestlé was helped by strong demand from emerging markets, where it makes about a third of its revenues. Huge sales in Pakistan helped its Pure Life water become the largest bottled water brand in the world.

Its first-quarter figures comfortably beat analyst expectations, despite the Swiss firm grappling with soaring costs of coffee, cocoa, milk, grain and crude oil.

Chief executive Paul Bulcke was bullish. "We achieved growth in all categories in the first three months of this year, maintaining last year's momentum," he said.

"In view of the strong start to the year, we are able to reconfirm our guidance for 2011 as a whole."